UK government approves Flybe – Aeroflap rescue deal

After reports of a difficult situation, Flybe received some good news. The UK government announced that it would withdraw some of Flybe's tax liabilities.

The airline has struggled financially for years, leading to a rescue attempt by Connect Airways, a consortium led by Virgin Atlantic and Stobart Air.

However, that only temporarily stopped the problems, as the airline this week consulted with the UK government to avoid a potential collapse.

Sky News reported that the airline has managed to conclude negotiations with the British authorities. The deal includes a tax exemption and an additional £20 million from the airline’s administration. All this in the hope that the company can steer itself in a better direction moving forward.

In addition, HMRC has agreed to defer a significant portion of Flybe’s tax liabilities. The agreement between Connect Airways and the government will save 2,400 jobs.

UK Chancellor Sajid Javid spoke about the importance of Flybe's operations.

“I welcome Flybe’s confirmation that they will continue to operate as usual, retain jobs and ensure flights continue to serve communities across the UK.”According to Sky News.

“The analyses we are announcing today will help lift our economy. They will ensure that regional ties will not only endure, but flourish for years to come – so that all countries and regions can realize their potential.”

Following the deal, Javid will reform how air passenger charge (APD) affects domestic flights. In addition, the Department for Transport will oversee a review of the UK’s regional links. Flybe currently has a strong presence across the UK, serving 25 airports across the country.