With Flybe almost collapsing for the second time in less than a year and the British Government stepping in to save the regional airline, the latter action by the authorities hit a nerve for some airline executives. Specifically, Michael O’Leary, the chief of Ryanair and Willie Walsh, the chief of British Airways’ parent company, International Airlines Group (IAG) (IAG).
“Loss-making airline owned by a bunch of billionaires”
Addressing a letter from Sajid Javid, the Chancellor of the Exchequer, O’Leary called it “inaccurate and seriously misleading.” In particular, Ryanair’s outspoken CEO claims that the measures to save Flybe are illegal and questions whether the Government needs to step in “if these billionaire shareholders [Virgin Atlantic, Stobart Aviation and Cyrus Capital – ed. note] are not willing to put their hand in their own deep pockets” to bail out the regional carrier.
“You confirm that Flybe has been “given time to pay” APD [Air Passenger Departure tax – ed. note], yet all of its competitor airlines in the UK continue to pay APD on time. This is in breach of state aid rules,” argues O’Leary. In addition, he calls for a reduction of APD for all airlines that use regional airports, not “just for one small loss-making airline owned by a bunch of billionaires.”
Furthermore, Ryanair’s main decision-maker calls for more transparency from the Government, as it considers providing a $129 million (£100 million) short-term loan to Flybe, which O’Leary calls a “billionaire bailout.”
“It is a fact that the vast majority of passengers who wish to avail of domestic regional services do so using motorway or train services, or Ryanair or easyJet low fare air services, rather than flying Flybe’s high fare, frequently delayed turboprop services.”
Mismanagement’s tab left for taxpayers
Meanwhile, IAG’s Willie Walsh commented that the consortium that took over Flybe “wants the taxpayer to pick up the tab for their mismanagement” something that is a “blatant misuse of public funds.”
While the United Kingdom’s Civil Aviation Authority (CAA) has not yet released full-year data for domestic travel within the country, preliminary data shows that from July through September 2019, that the amount of domestic passengers traveling on UK-registered carriers is falling compared to the same period in 2018.
What raged airline bosses?
After Flybe publicly announced that the airline is looking for a buyer in late-2018, in early-2019, Virgin Atlantic, partnered with Cyrus Capital Partners and Stobart Aviation created the Connect Airways consortium to purchase the struggling regional carrier for a measly $2.8 million (£2.2 million). However, as 2020 began, Flybe was once again at the forefront of struggles and was bailed out by the Government in a way of deferring Air Passenger Duty tax payments. Furthermore, the British lawmakers are considering giving a commercial loan worth $129 million (£100 million) to help the regional airline.