Evening Call: The deal to save Flybe is good for passengers – and terrible for the planet

This won’t be the last time the government does something that contradicts its own environmental policy.

Well, the good news is that, if you’re someone who regularly needs to fly from, say, Belfast to Cornwall, or Anglesey to Cardiff, then the flights you rely on are not going to stop any time soon. The bad news is that the planet is burning and we’re probably all going to die.

This probably needs some context. The government has agreed a deal to prop up Flybe, by deferring some of its air passenger duty payments. The struggling airline is facing a tax debt widely believed to stand at over £100m. (And you thought your finances were looking tight this January.) The move will enable the airline to keep flying, while its owners – Virgin Atlantic, Cyrus Capital and Stobart Air – invest another £20m into the company.

The deal has been welcomed by passengers, some of whom rely on the airline’s fairly eccentric selection of routes. But it has been attacked by two different sets of people, one of which has a much stronger case than the other.

The weaker case comes from other airlines and the rail industry, who’ve got the hump that the government is propping up a rival. EasyJet and Ryanair have both said taxpayer funds shouldn’t be used to prop up their competitor, while IAG, which owns British Airways, has filed a complaint to the EU arguing that the deal breaches state aid rules. In his letter to transport secretary Grant Shapps, BA chief executive Willie Walsh pointed out that Virgin Atlantic is – I paraphrase – really not short of a few bob.

I’m not going to get into the legal ins and outs of bail out – I simply don’t know. But I do think that, from a philosophical standpoint, the idea is entirely defensible, on the grounds that governments subsidise unprofitable transport routes all the time to ensure that those links exist. The railways are still subsidised, albeit less and less as the years go on. In London, busy bus routes are used to subsidise unprofitable but socially useful ones.

And so, if the government thinks there needs to be a direct link between Jersey and Inverness, and no other airline is planning to provide one, there is nothing inherently wrong with deciding it’s worth propping up Flybe. Apart from anything else, Flybe already receives money to run its Newquay to Heathrow route under a “public service obligation” contract.

The stronger case against subsidising an airline is the one made by the Rail Delviery Group, which represents the train operators. It argues that any review of air passenger duty “that encourages more people to fly domestically would limit efforts to tackle the efforts to tackle the climate crisis”, and it is very obviously right. Or, as Green MP Caroline Lucas puts it: “Domestic flights need to be reduced, not made cheaper.”

This, given that it’s 2020 and much of Australia has spent the year so far on fire, feels like rather …read more

Source:: New Statesman


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