17th Jan 2020 11:33
(Alliance News) - Struggling UK airline Flybe said Friday it is seeking a state loan and has been granted a tax holiday, after this week's rescue which has sparked anger from rival carriers.
Flybe managing director Mark Anderson said in a message to staff that the regional airline, which narrowly avoided collapse on Tuesday, is in talks over the loan.
"We are in conversation with the government around a financial loan – a loan, not a bailout – a commercial loan, but that is the same as any loan we'd take from any bank," Anderson said in a message that was initially reported by the BBC and confirmed to AFP.
He added: "The government will not lend if they do not believe there is a credible plan.
"No-one is going to throw good money after bad."
Flybe added in a separate statement that it has agreed a payment plan to defer tax payments of less than GBP10 million with Britain's tax authority HMRC.
The airline said that this was standard HMRC practice for businesses in financial difficulties.
Flybe meanwhile criticised "inaccurate" UK media speculation that its tax debt stood at more than GBP100 million.
The carrier was saved from collapse on Tuesday when the UK government agreed to review air passenger duty paid by the Flybe's customers, while shareholders pledged extra investment.
In response, British Airways parent group International Consolidated Airlines Group SA on Wednesday filed a formal complaint to Brussels over what it argued was state aid to Flybe.
Downing Street argues however that it was not state aid, while any APD changes would apply to the whole aviation sector.
Flybe – owned by Virgin Atlantic, investment firm Cyrus and infrastructure specialist Stobart Group Ltd – is struggling due to weak demand and fierce competition.
Employing some 2,000 people, Flybe has failed to turn around its fortunes since it was purchased a year ago by a consortium led by Virgin.
Flybe, which claims it has been weakened also by uncertainties related to Brexit, carries around eight million passengers annually and flies from 43 airports across Europe and 28 in Britain. It is the biggest operator of UK domestic flights.
source: AFP
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