Below is the text of the statement made by Kelly Tolhurst, the Parliamentary Under-Secretary of State for Transport, in the House of Commons on 5 March 2020.
With permission, Mr Speaker, I shall make a statement about the collapse of Flybe.
In the early hours of this morning, Flybe ceased trading. This was a commercial decision by the company and Flybe has filed for insolvency. UK airports handled 9.5 million Flybe passengers in 2008, 80% of whom were travelling within the UK. An estimated 15,000 passengers were due to fly today, so our immediate priority is to support passengers travelling home and employees who have lost their jobs.
Flybe has had a challenging year in terms of its financial performance, with a decline in bookings and increased competition. Levelling up connectivity across our regions and nations is a top priority for this Government. We are driving forward HS2 and Northern Powerhouse Rail, we have announced a £5 billion funding package for bus and cycle links, and we are investing £6.6 billion to improve the condition of local highway networks between 2015 and 2021. We are undertaking a review of regional connectivity to ensure that the UK has the domestic transport connections on which local communities can rely, including regional airports. The Treasury is also reviewing air passenger duty to ensure that regional connectivity is supported while meeting the UK’s climate change commitment to meet net zero by 2050.
These measures featured in conversations with Flybe back in January and, in turn, it agreed to continue operating. Since then, we have been working tirelessly to explore multiple options with Flybe shareholders to find a solution. Flybe outlined that problems with its business had been compounded by the outbreak of coronavirus, which, in the past few days, has had a significant impact on demand. The directors have therefore decided that it was not viable to keep Flybe operating. Unfortunately, in a competitive market, companies do fail, and it is not the role of Government to prop them up.
Given the time of year, the nature of Flybe’s business and fleet, and the routes that it flies, sufficient alternative transport arrangements should be available, either with other airlines or by road and rail.
The number of passengers abroad is small and it is further reduced as a result of coronavirus. For those passengers who are abroad, there is sufficient capacity on commercial airlines to return to the UK. The Civil Aviation Authority and the Secretary of State are encouraging these airlines to offer rescue fares, and that is already happening. I thank those airlines, including easyJet, which has today announced that it will offer Flybe passengers a dedicated rescue fare until the end of May. We are working with bus and rail operators to support Flybe passengers to get to their destinations, and I am extremely grateful that the Rail Delivery Group has this morning confirmed that all operators are offering free travel to Flybe staff and passengers for a week.
I ask passengers due to fly with Flybe in the next few days not to turn up at the airport. Instead, they should look at the website set up by the Civil Aviation Authority, and talk to their travel agents, travel insurance providers and credit card companies. For those who do arrive at UK airports today, we are making Government representatives available to offer support and provide information to affected passengers.
I express my sincere sympathy to those who have lost their jobs as a result of this failure, including crew, engineers, technicians, staff at Flybe headquarters in Exeter and others. We understand that this is a worrying time for workers and their families. The Department for Work and Pensions stands ready to support anyone affected by the closure with its rapid response service offer, which will be available to all those affected through local Jobcentre Plus outlets. Additionally, in the event of any redundancies, there are special arrangements for employees who are owed redundancy payments and other payments by their insolvent employer. The redundancy payments service in the Insolvency Service can pay certain amounts owed to former employees from the national insurance fund. I will work with my ministerial colleagues to ensure that any redundancy payments are paid to affected employees as soon as possible.
We recognise the impact that this situation will have on UK airports, particularly those which have large-scale Flybe operations. The Government stand ready to support the sector, and I have full confidence that it will respond as effectively as it always has. We are urgently working with the industry to identify opportunities to fill routes, and I have spoken to the airlines today to emphasise this. Aviation is facing challenges globally due to the impact of coronavirus. The Government are well prepared for this, and as the wider economic picture becomes clearer, the Chancellor has said that he stands ready to announce further support where needed. I will be chairing a roundtable with members of the aviation industry next week to discuss issues presented by coronavirus.
I thank passengers for their patience and appreciate the work undertaken by everyone who has again stepped up to ensure that passengers and local communities are supported. We will continue to work across Government to ensure that passengers and staff are able to access the information and services they require at this sad and challenging time.