Flybe

Baroness Randerson 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.

[Lord Foulkes of Cumnock (Lab Co-op)]

Look at the time. This is a Statement, not a debate.

[Baroness Randerson]

The two Opposition Front Benches are allowed 10 minutes, and I would like to finish what I am saying. Coronavirus will tip other transport operators into difficulties as well. Especially at this time, when we are expecting a large number of people to need healthcare, I ask the Government what measures they are putting in place to help the transportation of NHS patients from the Isle of Man to hospitals in Liverpool, which is a role that Flybe has undertaken up to now. This is a very specific concern.

[Baroness Vere of Norbiton]

I thank both Front-Benchers for their contributions; a number of very important issues were raised, some of which I can agree with and some of which I probably cannot. I think that all noble Lords will agree that the loss of Flybe is a significant hit to regional connectivity, and we must work with the regions to make sure that people are able to get to where they need to go. I am a little concerned that there seems to be much focus on regional connectivity and just air travel, but there are several ways of travelling from the regions. The noble Baroness, Lady Hayter, mentioned the south-west. The south-west does have trains and does have coaches; there are other ways to travel. The Government are undertaking a review of regional connectivity which will focus on aviation but will cover all modes of transport to understand exactly how the regions can interconnect.

There are two things—this was raised also by the noble Baroness, Lady Randerson—about connectivity. It is not enough to get connectivity between airports; we must also make sure that there is good access to the airports and the train stations. Of course, this is all top of mind within my department.

The noble Baroness, Lady Hayter, mentioned the passengers who have booked flights, and whether they will be able to get their money back. This is a private sector company, and it concerns all of us that some people may not have adequate protection. This will once again highlight, as other failures have in the past, the importance of having insurance. Some passengers will have ATOL cover. Others who have paid by credit card may be able to get their money back under Section 75 of the Consumer Credit Act. Some passengers may be able to claim a refund by applying for chargeback, if they paid by debit card. Passengers can seek additional information and advice from Citizens Advice or Advice Direct Scotland.

The noble Baroness, Lady Hayter, mentioned CAA resources; the CAA outlines the adequacy of its resources every year in its annual report. It is working within its current resource envelope in order to staff the failure of Flybe, and we are not aware that it has any concerns.

The Government are, of course, working very closely with all of the airports. A number of airports were heavily reliant on Flybe flights. We are working very closely; my colleague the Aviation Minister has already called the airlines and the airports this morning, and that engagement will continue. Later today, she will be calling key figures, either metro mayors or local authorities, where appropriate.

In terms of protections for employees, both of Flybe and of the different airports, the DWP does stand ready to offer support. It has been in touch with both BALPA and Unite already today and is working with them.

One of the points from the noble Baroness, Lady Hayter, made me feel that she is very much in favour of aviation. However, Labour wants to include a frequent flyer levy, which would have a significant damaging impact on aviation. Should Labour wish to retain its goal of net zero by 2030, I think it was the GMB that said that that would mean one flight every five years for people. So I am not entirely sure that Labour can be the great champion of aviation; should it ever come to power it would indeed decimate it.

The noble Baroness, Lady Randerson, mentioned PSOs. Those will be really important going forward and will be one of the key levers in the way we will be able to improve connectivity. We are looking at all options for expanding the scope of PSO policy. As we leave the European Union, the different rules we will be able to put in place will certainly be hugely beneficial to various places. On her specific question on transport from the Isle of Man to Liverpool, I will need to write forthwith.