Confus

Didn’t we work out that flybe gets the Heathrow slots grandfathered if they’re still operating at the end of March? So in 3 months they realise their biggest and most valuable asset. This might well be enough to get the investors to feel more secure. Effectively a ‘bridging loan’. And I do reckon in the same situation the govt would give it to anyone.

mastutio

The narrative certainly seems to be portraying Flybe as an essential business airline for the regions but looking at the destinations from BHX at least it is clear a sizable proportion of its routes are primarily leisure routes (such as Avignon, Bergerac, Bordeaux, Brest, Chambéry, La Rochelle, Lyon, Milan–Malpensa, Nantes, Innsbruck, Kefalonia, Lleida, Preveza/Lefkada and Turin)

These aren't traditional bucket and spade leisure routes either. I would guess they are very much aimed at the more discerning and affluent traveller. Whereas business travellers will have no choice but to continue to book with Flybe where there is no alternative, I wonder whether that same discerning leisure flyer will be happy to book their Summer 2020 holiday with Flybe in their current predicament? I would guess they might not.


Surely once the confidence has been lost the end is inevitable?

Cw novice

Was thinking this too, I wonder if part of the deal will see them have to cutback on their non UK routes and focus on the regional connectivity at home.

Kgmm77

Therein lies the danger of relying on one data point. If you looked at Belfast City, you’d see exclusively UK destinations.
Aberdeen, Birmingham, Cardiff, East Midlands, Edinburgh, Exeter, Glasgow, Inverness, Leeds/Bradford, London–City, London-Southend, Manchester, Southampton, Newquay.

T8191

Likewise for ex-JER ... UK destinations only [and about 15/day, if you include the Blue Islands franchise to LCY]. Jersey is a 'region' feeding the UK mainland.

I suspect Guernsey (GCI) traffic is similar. Checking Departures for tomorrow ... 12 BE flights .... looks like JER, SOU, BRS, BHX, LHR, EXE ... with some connecting through JER. No LHR connection from JER, though

IAN-UK

I think that's not entirely correct. Brussels insisted on adjustments to the way the tax was initially implemented on domestic return trips.

NickB

Can't remember whether changes were required to the initial design but it is indeed the case that, while Member States have much freedom to create, change or remove many taxes, there are nonetheless some limits to their discretion. In particular, they cannot discriminate, directly or indirectly, against goods or service providers in other Member States or against providers of cross-border services and they cannot have taxation rules or practices that amount to unauthorised state aid. That does place some limits on what they can do. In particular, as I already noted in an earlier post, it is far from clear that a wholesale exemption of domestic services from APD while imposing APD on services between the UK and other Member States would be compatible with EU Law on freedom to provide services.

IAN-UK

I think the original model had a single tax on domestic return tickets: the same tax levied on a one-way domestic flight.

I suppose the errant thinking (if there were any deep thoughts) was that as international return trips could attract tax in only one direction, consistency demanded a similar asymmetrical approach to the domestic market.

To satisfy the spirit and letter of EU law, the revised design saw APD (at half the rate originally applied) attached to each trip departing from a UK airport.


The were were similar fun and games in the Irish version of APD.

SonTech

Seems Flybe will be moving its NQY-LHR flights to LGW in March..
https://www.bbc.co.uk/news/business-51134859
I wonder why they are waiting until March and not now... hmmmm… Call me cynical but I suspect this is what Virgin/Delta where after all along in its take over on the cheap and hence why they didn't bother putting its own money into Flybe until forced to do so by the UK Government

jonas123

these slots are of course limited to European routes only so not that useful to VS/DL. You can see perhaps AF/KLM taking on some of the Flybe slots and releasing their unencumbered slots to VS/DL

UKtravelbear

because the end of March is the start of the summer season

Also the report you link says

So perhaps not as newsy as it appears to be

rapidex

4X LHR slot pairs for European flights, worth approximately £20 million each. Flybe could lease them to AF/KL, which would in turn release slots that could be used for other things. All paid for by the taxpayer. Pretty slick. Now, if they can all get a reduction in domestic APD, that will make positioning to INV for B2B to long haul so much more viable. Hopefully BA will reduce the taxes on domestic Avios redemptions.

Prospero

This episode is turning into a Shakespeare tragedy. FlyBe has gained a short term deferral on its APD payments to the HMRC. According to FlyBe, this sum is less than £10M. It's investors agreed to plow an additional £20M into the company. But at what cost...

Public confidence in the airline is now shattered. Its operating costs remain unchanged - burning somewhere in the region of £1.25M per day. Its cashflow problems cannot possibly improve.

UKtravelbear

APD is a tax

BA surcharges aren't.

And is paying £13/£26 each way depending on cabin such a hardhip when you save several hundereds of pounds doing an ex-INV?

LimitingFactor

Yes, indeed - the cynical view could be that Flybe decided they wanted to shift NQY away months ago, but couldn’t get permission to modify the PSO contract unless ‘oops’ they were in trouble and ‘you have to let us otherwise we’ll fold and NQY will be cut off’.

BTW, I notice that GCI-LHR is off sale too from April.

LF