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Published on Friday, January 24, 2020

Chancellor responds to O'Leary's legal threat over Flybe rescue deal




Ryanair chief Micheal O'Leary has received a letter from the chancellor dismissing claims that the Flybe rescue plan was state aid.

Sky News claims to have seen a letter from Sajid Javid in response to complaints from Ryanair, and other UK airlines, about the help the government gave to the troubled regional airline.

O'Leary has threatened to take legal action over what he claims was a 'breach of competition law and state aid rules'.

But according to Sky News, Javid dismissed the complaints and insisted Flybe did not receive state aid.

Instead he said the government's decision to allow Flybe extra time to pay its Air Passenger Duty bill had been a 'standard Time to Pay arrangement...because of their short-term difficulties'.

He said arrangements were granted to more than 700,000 business and individuals last year who have 'genuine short-term difficulties'.

Javid's letter reportedly said: "Indeed, were Ryanair to ever get into short-term difficulties, the company could ask for such an arrangement."

But the chancellor's letter did not refer to the negotiations about a state loan.

Flybe is regarded a vital airline in the UK domestic aviation sector as it serves regional routes which no other airline operates.

It is owned by Connect Airways, a consortium which includes Stobart, Virgin Atlantic and Cyrus Capital.

Stobart Group is contributing up to £9 million as part of the rescue deal. It blamed a 'delay in receiving control' of the business for the failure of a turnaround plan to be put in place.

 

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