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Government's rescue plan for Flybe is ‘another taxpayer bailout’ for billionaire Branson

THE government’s rescue deal for Flybe was slammed today by Labour shadow transport secretary Andy McDonald as “another taxpayer bailout for Richard Branson from the Tories.”

The package of measures includes a potential loan of around £100 million, a possible short-term delay of a £106 million air-passenger duty (APD) bill and a pledge to review domestic flight taxes before the March budget.

Flybe, the largest regional airline in Europe with 139 routes across Britain and the continent, was on the brink of collapse with about 2,300 jobs at risk.

Before the deal was announced on Tuesday, Mr McDonald warned against “feathering the nest” of Mr Branson, whose Virgin Atlantic airline leads the consortium that bought Flybe last year.

Mr McDonald also said during a Commons urgent question on Tuesday that that there was “clearly a case for government intervention” to avoid a repeat of the Thomas Cook “debacle.”

But, in response to the deal, he criticised the proposed review of APD — saying that a tax cut will “encourage the small number of wealthy frequent flyers who are responsible for 70 per cent of all trips to fly even more, increasing carbon emissions.”

He said: “A review into slashing aviation tax makes a mockery of the government’s climate commitments.”

Greenpeace UK executive director John Sauven insisted that the government should invest in “clean transport infrastructure” and make sure that commuters are “not clobbered by rail-fare hikes every year.”

Unite assistant general secretary Diana Holland said the company, government and unions need a “joined-up approach” to develop a transport and regional strategy to secure the long-term future of Flybe, regional airports and other regional airlines.

Pilots’ union Balpa said it was pleased that jobs had not been lost and that it now needed to discuss “future plans in detail” with management.

International Airlines Group, owner of rival airline British Airways, has filed a complaint with the European Union over the government’s rescue plan, claiming it breaches state-aid rules and gives Flybe an unfair advantage.

The government has also faced criticism from industry groups over the bailout, given the need for financial support and action in other sectors.

UK Hospitality CEO Kate Nicholls said: “If APD can be reviewed and waived to support Flybe then business rates should be cut and reviewed to stem the continued high-profile casualties on the high street and in hospitality.”

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