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Flybe: Should the government bail out the regional airline?

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By Julie Gaubert  & AP
A Flybe flight departs from Manchester Airport, England, Monday Jan. 13, 2020.
A Flybe flight departs from Manchester Airport, England, Monday Jan. 13, 2020.   -   Copyright  Pete Byrne/PA via AP   -   Pete Byrne

The British government's agreed a financial plan to save the airline, Flybe - which had been on the brink of collapse.

The UK company is understood to have significant tax debts, which are to be restructured. Flybe is Europe's largest regional airline, and connects UK cities with European destinations.

Unions had been among those urging Boris Johnson to intervene. They argued it would safeguard 2,000 jobs and preserve regional connectivity in the UK. The airline has a major presence outside London in places like Aberdeen, Belfast, Manchester and Southampton.

But environmentalists argue that the UK cannot be serious about tackling climate change if it then bails out an airline.

The uncertainty around Flybe's future came a year after the carrier was bought by Connect Airways, a consortium of Virgin Atlantic, Stobart Group and Cyprus Capital. At that time, it paid just £2.2 million for Flybe's assets but pledged to inject cash into the airline to turn it around.

Up to now, Flybe has struggled with a succession of issues, including the weakening of the pound sterling, in view of pending Brexit.

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On Monday (January 13) Prime Minister Boris Johnson told the BBC that — despite recognising Flybe's importance across the UK — it isn't for the government to "step in and save companies that simply run into trouble."

We're working very hard to do what we can, but obviously people will understand that there are limits, commercially, to what a government can do to rescue any particular firm
Boris Johnson
British Prime Minister to BBC

He had also added his wish to make sure to keep "the regional connectivity that this country needs".