Flybe

Baroness Hayter of Kentish Town Excerpts

Thursday 5th March 2020 Lords Chamber

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the Minister for repeating the Statement. This collapse could have very serious consequences, not just for those currently stranded here or abroad; not just for employees—the ground staff at airports as well as direct employees—and not even just for the insurance industry. This collapse has longer-term consequences, particularly for our regions, heavily reliant on connectivity for employment, tourism and travel. I need hardly say that with the almost certain economic impact of coronavirus and travel changes after 31 December, the loss of a major transport link could have particularly serious consequences.

Any attempt to blame this collapse on the coronavirus will not wash. Transport experts had been warning about the state of this company well before the first cough, and the Government must explain why a proper plan was not in place before recent events. We have been here before with passengers affected by the collapse of Monarch and Thomas Cook. This case is worse for some, with fewer passengers travelling on packages and therefore not necessarily ATOL-protected. We welcome what is being done in the short term to get passengers home, but there is also the loss of holidays and other associated costs. Can the Minister spell out the plans to assist those passengers beyond mere transport? Also, how does the Government plan to re-establish trust in the industry, which is taking a serious hit? Given that the CAA has sustained funding cuts under this Government, can the Minister confirm whether any additional financial support will be provided to enable it to support passengers following Flybe’s collapse?

The impact of this on the regions and nations of the UK cannot be overestimated: 80% of flights at Belfast City Airport are operated by Flybe, 95% at Southampton, 50% at Humberside and at Wick, and 100% at Anglesey, with 30 other airports affected. Many of these provide critical connectivity, often where there is no realistic alternative to flying. Indeed, some of these smaller airports might now themselves be at risk. The impact on small businesses could be devastating. Can the Minister outline the support that will be made available to communities, and could she confirm that the Government will meet urgently with local authority representatives and airport operators to agree a package of central government help?

Passengers, local economies, and of course 2,000 employees face a difficult time ahead. Can the Minister confirm what engagement the Government have had with Unite and BALPA today and give an undertaking that the Government will play a full role, alongside Unite and BALPA, to help Flybe workers find new jobs?

The talk of HS2, bus and cycle lanes in the Statement sounds woefully misplaced in this context. That will not help Cardiff and the south-west, and they certainly will not help Belfast. The words

“The Government are well prepared”


for the impact sound hollow today, as an airline folds due to a slight downturn in bookings. The impact on consumer confidence, on the likelihood of passengers and businesses continuing to book flights, and on their concerns about cancellations and loss of money must not be underestimated. Will the Government agree to engage with the relevant user and consumer groups, so they can also play their part in in rebuilding consumer trust and ensuring that passengers are treated fairly?

[Baroness Randerson (LD)]

My Lords, I thank the Minister for the Statement, which comes at a time of huge concern in the aviation industry. When Flybe first publicly hit problems a couple of months ago, the Government wildly overpromised the help that was on offer, or potentially on offer. It turns out that virtually none of that help was possible, partly because of the concern in the rest of the aviation industry about fair competition but also because the Government, for one reason or another, have not been able to offer money on reasonable terms to the company.

All the grand schemes in the world will not help the people who are losing their jobs today or who are being cut off from the regular routes that they use which are important either to their families or to their businesses. In this Statement the Government repeat some of these grand, long-term promises—but, to be fair, that is actually irrelevant at this time.

On competitive market companies that fail, the Statement is really surprising, given the Government’s response couple of months ago. It says:

“It is not the role of government to prop them up.”


But two months ago, the Government were offering assistance that effectively was promising to do that. Shape shifting will not help the market. What help, if any, did the Government, in the end, provide to Flybe? Was Flybe able to defer the payment of any taxes, or was that not possible?

Beyond the concerns for Flybe employees and the passengers who have paid money for flights, amply outlined by the noble Baroness, Lady Hayter, there will be a very serious knock-on effect at smaller regional airports in the UK. Some of those airports could also find they cannot continue operating. The Statement says:

“Government stands ready to support this sector.”


Exactly how will the Government offer help to this sector? There is a danger that the Government are offering more help that actually cannot be implemented in the end.

The importance of Flybe has been overwhelmingly in its routes to isolated parts of the UK. Some such routes in the UK have PSO status, but only one is a Flybe route: the Newquay to Gatwick route. France has 22 PSO routes, so, even if we are still working to EU rules on this, I ask the Government to reconsider the number of internal routes that are given PSO status, because that is what will provide long-term certainty and a long-term levelling up for parts of the country that are very isolated.

Coronavirus is undoubtedly a factor in tipping this company over the edge probably slightly earlier than would otherwise have happened, and there will be other cases.