PARLIAMENTARY DEBATE
Flybe - 14 January 2020 (Commons/Commons Chamber)

(Urgent Question): To ask the Secretary of State for Transport what support has been made available to Flybe, its passengers, and the regional airports that facilitate many of its routes, and whether he will make a statement.

I thank my right hon. Friend for raising this matter. She is a strong advocate for her local airport.

Let me stress that Flybe remains a going concern. Flights continue as scheduled, and passengers should continue to go to the airport as usual. I must also emphasise that regional air carriers and airports are vital to the Government, playing a key role in providing connectivity between communities, regions and nations across the United Kingdom.

The speculation surrounding Flybe relates to commercial matters. The Government do not comment on the financial affairs of or speculation surrounding private companies. We are working hard, but there are commercial limits on what a Government can do to rescue any firm.

Be in no doubt, however, that we understand Flybe’s important role in delivering connectivity across the entire United Kingdom. This Government are committed to ensuring that the country has the regional connectivity that it needs. That is part of our agenda of uniting and levelling up the whole country. We do not have good enough infrastructure in many areas, and people do not feel they have a chance to get to the opportunity areas with high-skilled and high-paid jobs. That is what this Government are addressing now.

I hope the House will appreciate that I regret that I am not able to go into further detail at this stage, but I will update the House further when it is appropriate to do so.

Flybe is, as the Minister said, an important regional airline, serving the UK market for business and leisure travel. I must confess from the outset that Southampton airport sits on the boundary between my constituency of Romsey and Southampton North and the Eastleigh constituency, but it employs many of my constituents and, of course, serves the much wider region. It is a crucial part of Hampshire’s connectivity, located adjacent to the mainline to London Waterloo and the M27 motorway, and it serves the cruise terminal at Southampton. It is in every sense a transport hub for the south-east, and about 90% of flights out of Southampton are run by Flybe.

I know that my hon. Friend the Minister is working hard on this issue, for which I sincerely thank him. He has been diligent in keeping me updated and has been in close contact with colleagues across the country who believe that the Government need to find a practical and pragmatic solution to the current reported difficulties, as indeed I do. It is a sensitive time for the company, but my questions today are not criticisms. We are seeking reassurance from the Government that solutions can be found.

I welcomed the comments from my right hon. Friend the Prime Minister this morning about regional connectivity. He specifically referenced Northern Ireland, and Southampton airport has a thriving route in and out of Belfast, not to mention Glasgow and Edinburgh, with onward routes to Aberdeen. It is a hub that serves the whole United Kingdom.

I do not wish to put the Minister in a corner, but I hope that he may be able to expand a little on what might be achieved with regard to air passenger duty, which has long been a concern to airlines and airport operators. We leave the European Union at the end of this month, which might give us some opportunity to consider the freedoms that there could be from state aid rules. I do not expect the Minister to make any sweeping announcements from the Dispatch Box, but I hope he and his officials are closely considering it.

What powers does the Minister have to protect the key strategic routes operated by Flybe and, of course, to protect its staff? Flybe employs 200 people at Southampton, and the airport employs some 900 people. A far wider supply chain relies on a thriving regional airport with a functioning operator.

We have an opportunity to use every lever of government to make sure that regional connectivity is maintained to ensure that businesses can operate smoothly and that people can move around the country seamlessly. I seek reassurance from my hon. Friend that he is pulling all those levers.

I thank my right hon. Friend once again for working hard on behalf of Southampton airport. I am acutely conscious of the fact that some 94% of Southampton’s passengers are Flybe passengers, and she makes an important series of points about the airport’s importance to her region. Indeed, I gather the airport is also important to inbound tourism.

My right hon. Friend tries to tempt me on to the topic of APD. It may help the House if I make it clear that Transport Ministers never comment on air passenger duty, which is a matter for the Treasury, and I do not intend to change that now. I will not be making any comments on air passenger duty.

I congratulate the right hon. Member for Romsey and Southampton North (Caroline Nokes) on securing this important urgent question. It is agreed on both sides of the House that Flybe, a great British brand, is a hugely important regional airline that provides a vital lifeline and connectivity for many of our communities. News of its difficulties will worry workers and passengers alike.

There is clearly a case for Government intervention, and I trust the Government will learn the lessons from their inept response to the Thomas Cook collapse, which saw other nation states being prepared to step in while this Government sat on their hands and contacted the company only after it was too late. We cannot have a repeat of that debacle. Flybe’s workers and passengers deserve better.

What restructuring plan has been agreed as part of the Government’s support, and what discussions is the Secretary of State having with the trade unions Unite and the British Airline Pilots Association? Will the Minister and the Secretary of State commit to ensuring those unions are fully engaged in the process?

The Government must avoid simply feathering the nests of the new consortium, including Virgin Atlantic and the Stobart group. Surely they knew the scale of the financial challenges facing them when they acquired the business. What was known to the new owners at the time of their acquisition? Prior to the acquisition, did they seek assurances on Government assistance and an indication of the Government’s intentions for APD? What discussions is the Minister having with the industry about transitioning to greater sustainability, including electric flights, and about whether current plans are compatible with reducing emissions?

Slashing air passenger duty across the board would make a mockery of the Government’s supposed commitment to climate emissions. It would also benefit a wealthy minority. Some 70% of UK flights are made by a wealthy 15% of the population, with the great majority of people not flying at all. Aviation is set to be the biggest source of emissions by 2050, with Ministers planning for demand to double.

The Government’s own advisory body on climate change has said that the UK is “way off track” to meet its climate change targets. Rather than proposing to slash aviation tax, will the Minister not listen to the recommendation of the Committee on Climate Change for a frequent flyer levy that would remove people who fly just once a year from taxation while making wealthy frequent flyers pay more?

I encourage the Minister to do all he can to support Flybe and its workforce, and to protect passengers, but can he assure the House that his Government will simultaneously and fully accept their responsibility to protect the planet?

I am grateful to the hon. Gentleman, particularly as we agree on the importance of Flybe to the country. The Government are working hard to find what they can do to support the company. I cannot and will not provide a running commentary on those discussions. He will note that the Secretary of State is not here to answer the urgent question, as he is having discussions in Whitehall and is working hard on behalf of the airline.

The hon. Gentleman mentioned the environmental aspects. Domestic aviation constitutes 4% of UK aviation’s overall emissions. He mentioned the advice of the Committee on Climate Change, which it gave to us just before the election, and we are looking forward to consulting on it imminently. In addition, the transport decarbonisation plan is coming soon.

We are acutely conscious of the fact that aviation has an important role to play in meeting our net zero target by 2050, and I am working very hard on finding the answers to those questions.

Thank you for granting this urgent question, Mr Speaker, which I know is important to many of us. I thank the Minister for his constructive engagement with me and many other colleagues on this matter.

It is difficult to overstate the importance of Flybe to Cornwall Airport Newquay and the wider Cornish economy. Contrary to the characterisation from the Opposition Front Bencher, it is many ordinary working people and small businesses in Cornwall that rely on the connection that Flybe provides, both across the whole country and, through Heathrow, internationally. May I therefore urge the Minister to do all he can to ensure that Flybe is able to continue operating? If he is able to use his influence to cut APD, he will have my full support in doing so. Will he confirm that the public service obligation route to Heathrow is not dependent on a particular airline and could be easily transferred should the worst happen to Flybe?

I am grateful to my hon. Friend for his comments. As he will know, some 74% of Newquay’s passengers use Flybe, so Newquay is also highly dependent on this airline, not least for a lot of its inbound tourism. He commented on the PSO flights. We will continue to work with the county council in Cornwall, the joint funder of those flights, to make sure that that service continues into the future.

First, may I ask what impact assessment has been undertaken on the effect of losing connectivity between Scotland and various UK regions if Flybe does go down? How many of these routes have been assessed as lifeline routes? What assessment have his Government made of the Flybe Heathrow slots if Flybe does not operate and of what that would mean for future connectivity? We know that Flybe operates outwith ATOL—the air travel organiser’s licence scheme—so what consumer protections are available for customers booking with these types of carriers? What changes do the Government propose to bring in to protect consumers? Where are we on the proposed legislation changes promised after the collapse of Monarch and then Thomas Cook? Given that there was no Government intervention previously, why are they now looking at doing something—we do support Flybe continuing to operate? Is that not firm proof that the Government need a comprehensive plan, rather than reacting with short-term fixes? What additional supports will the UK Government bring forward across the entire sector that they have ignored to date?

Will the Minister confirm that the Government do not ring-fence APD moneys for tackling climate change? What message does talk of delaying revenues or reducing APD send out about the Government’s willingness to tackle climate change?

What is the deadline for Government action, because this is going to create further market uncertainty and will hit future bookings for Flybe?

Let me start by reinforcing the fact that Flybe remains a going concern; flights continue to take off and land, and passengers should go to the airport.

I very much take the hon. Gentleman’s point about the importance of Flybe, not just to the regions of England but to the nation of Scotland and, not least, the oil and gas sector out of Aberdeen—I genuinely understand that. He makes an observation about PSO flights, both within Scotland and to London. We are looking at PSO flights policy more widely and whether we need to consider further options.

The hon. Gentleman mentioned slots at Heathrow, and he will be aware that slots are a matter for the independent ACL—Airport Coordination Limited—body. No decisions have been taken on the use of further slots at Heathrow in this regard.

The hon. Gentleman mentions protection for consumers. Those who are on a package are covered by ATOL, but, as he will know, there is separate travel insurance and those who pay by credit card will have consumer protections. We continue to review consumer protection more widely within the travel sector. He will also know that in the Queen’s Speech we announced the airline insolvency Bill, which will come forward shortly.

Once again, I reiterate that I cannot offer the running commentary the hon. Gentleman looks for on what is occurring within Government.

First, let me thank the Minister for keeping me informed of developments as they have gone on and reassure him that, despite the shadow Secretary of State’s characterisation, it is not the richest 15% of people in my constituency who use this vital service. Some 94% of flights out of Southampton are operated by Flybe, meaning that any loss of service will have a detrimental impact on the local economy and jobs in my constituency. Given this Government’s pledge to back prosperity across the whole United Kingdom, will he reassure me that he will do anything and everything necessary to keep this airline afloat for my constituents and local jobs in Eastleigh?

I reassure my hon. Friend that we are working hard on behalf of Flybe and Southampton airport to find solutions wherever we can. He is right to point out the importance of improving regional connectivity across all modes, as the Prime Minister said today.

There is something of a pattern developing. We have had the collapse of Monarch and of Thomas Cook, and now the potential collapse of Flybe. When, in the last Parliament, the Business, Energy and Industrial Strategy Committee took evidence on the collapse of Thomas Cook, the evidence we heard from the business and the trade unions was the same; they said that the Government were asleep at the wheel. What lessons have the Government learned from that collapse? What are they doing to ensure that passengers are protected, that critical routes that connect regional towns and cities are supported and that the taxpayer does not end up footing the bill for another corporate failure?

I hear what the hon. Lady says. I am sure she knows that across Europe as a whole the airline sector is a highly volatile market. I do not accept her comparison at all. We continue to work hard and I have made comments already about public service obligation flights.

The Flybe crisis—and it is a crisis—could soon become a major disruption for many of my constituents, with half term looming. There is clearly a short-term issue here that I know Ministers are grappling with; I wish them well and they have my support. There is an uneven playing field around APD and regulations on regional airlines and airports, and that has without doubt contributed to Flybe’s current predicament. Longer term, is there any appetite within Government to address that and the crippling impact it is having on the regional connectivity that the Minister and the Prime Minister have rightly referred to?

I recognise what my hon. Friend says. Our network of regional airfields is crucial to our regional connectivity. I am acutely conscious of that and I am looking at all policy options.

Over the coming months it will become ever more apparent that tackling the climate emergency means rapid changes to high-carbon sectors and that aviation must decrease, not increase. Instead of bailing out polluting companies every time there is a crisis, and, in this instance, doing so in a way that is going to increase emissions, does the Minister agree that the Government should instead be developing just transition plans for high-carbon industries, including retraining workers in new sustainable jobs, involving unions and local communities, and, in this case, enhancing rail connectivity?

I think the hon. Lady overlooks what we seek to do to ensure that aviation plays its role in reaching net zero by 2050. As I have said, we will consult on our response to the Committee on Climate Change. The Minister with responsibility for future transport, my hon. Friend the Member for Mid Norfolk (George Freeman), is working hard looking at how to diversify the plane market, and we are bringing forward a transport decarbonisation plan. In the Department, we are informed with good ideas about how we can decarbonise transport.

As my hon. Friend the Member for St Austell and Newquay (Steve Double) ably said, the links between London and Cornwall are vital to many of our constituents, not just in his constituency but across Cornwall. Those links are important for the many small businesses that access contracts and come to London for business meetings, but also for net inbound tourism when people fly in from other countries to visit London and come down to Cornwall for a few days’ break. I ask the Minister to do all he can to ensure that the link remains.

My hon. Friend is quite right to point out the importance of the links between Newquay and London, not least for tourism. That is why we set out the public service obligation, and it is why we will carry on working with the county council to ensure its continuation.

The new owners of Flybe got the airline for a song, destroying shareholder value. They must not be allowed to profit from the public sector through subsidy for their failure. The Minister has made clear his position on APD—he will not comment—but does he recognise that that tax is damaging to the economy and costs jobs? Does he recognise that reports given to the Department for Transport and the Treasury show that abolishing air passenger duty would lead to an increase in tax income and have a beneficial impact on the economy and jobs? Will he look at those reports?

I am certain that the Treasury has heard the hon. Gentleman’s comments loud and clear.

Many airlines that face these types of difficulties would get more certainty and would be more able to get through them if they were allowed to continue to operate while in administration. Airlines in the States have done just that, and have returned and are now succeeding. Will the Government look into that type of reform when they press on with the insolvency review, which I hope will happen in the early part of this Parliament?

I am sure my hon. Friend will welcome the airline insolvency Bill and the work going on, in the light of the Green Paper, to improve consumer protection across the airline sector as a whole.

Many of my constituents work at or travel from Cardiff airport in the Vale of Glamorgan. They have already been hit by the collapse of Thomas Cook and, indeed, by Flybe’s reductions, the removal of its base—with the loss of 60 jobs last year—and its cutback of routes. Will the Minister explain whether he or the Secretary of State have had conversations directly with the Welsh Government, who are obviously crucial in terms of Cardiff airport’s viability going forward?

I am more than aware that some 30% of Cardiff’s passengers stem from Flybe. I reassure the hon. Gentleman that the Department and the Civil Aviation Authority are in regular touch with all the devolved Administrations to discuss the ramifications.

I apologise for my raspy tones because of a recent cold. I congratulate my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing the question.

Flybe is based in my beautiful constituency of East Devon and employs around 2,000 people nationwide, contributing a great deal to our local economy and providing essential transport links. Does the Minister agree that it is wrong to politicise the situation with Flybe, as Opposition Members have managed to do so far, and that work should be done to ensure that this vital airline continues to serve the south-west and beyond?

I am grateful to my hon. Friend for his comments. He is right to observe the importance of Flybe in his constituency. I am very much aware that, wherever possible, we should work on a cross-party basis when faced with immediate challenges.

The Minister referred to the airline insolvency Bill; will he confirm when that legislation will be brought forward? Many Members have spelled out the importance of their regional airports and domestic airlines for local economies, but what assessment has the Minister made of the future role of domestic aviation in our transport networks? How will that fit with the Department’s decarbonisation plan?

On both those questions, I am afraid the answer is “Wait and see.” We are looking to bring forward the airline insolvency Bill as soon as we can. We recognise its importance, but it is a complex policy area and there is no silver bullet, so when we bring it forward it has to be right. On the wider issue of how decarbonisation fits in and how aviation can play a role, that will be covered in the transport decarbonisation plan. I recognise that there are trade-offs to be made; we have to have a balanced approach.

I congratulate my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing the urgent question and thank the Minister for his response.

The routes that Flybe operates out of Aberdeen International airport are vital to jobs and the local economy in West Aberdeenshire, connecting the energy capital of Europe, which is Aberdeen, to other energy hubs such as Teesside and Humberside. What work is being done in the Department to make sure that these economically vital routes are protected in future?

My hon. Friend is right to observe, as I did earlier, the importance of these services to the oil and gas sector in particular. The Department and the CAA as a whole are examining the economic impact of any changes that may occur across all our regional airports, but our focus is on working hard to ensure that we get the right result.

I entirely accept the importance of regional airports to jobs—Bristol airport is on my doorstep and I was a director of London Luton airport in my days as a councillor in Luton—but the fact that the Minister can come to the House to answer an urgent question about domestic flights without mentioning decarbonisation and climate change once just shows—[Interruption.] He has mentioned them in response to questions but did not mention them in his initial response. He has been prompted to do that. It is not enough to kick it into the long grass and say, “This is something we’re going to deal with in the future.” Decarbonisation and climate change need to be factored into the Minister’s response to the Flybe emergency and APD now.

I have mentioned decarbonisation at least three times. I tried to obey Mr Speaker’s instruction to keep my opening statement brief. I entirely recognise the importance of decarbonisation, and a significant amount of work is occurring in the Department, between two Ministers. I ask the hon. Lady to wait to see the documents when they are produced.

Last year, 30% of all flights from Birmingham airport were operated by Flybe, and a lot of employees of the airline and the airport will be very worried about the current situation. Can the Minister reassure me and my constituents that he and the Government are doing everything practically possible that they can do in talks with Flybe to protect jobs?

I recognise the importance of Flybe to Birmingham airport, one of our key national airports. The Government are working hard, as I keep reiterating. We are certainly doing our best.

As I said earlier, the Minister of State, Department for Transport, my hon. Friend the Member for Mid Norfolk (George Freeman), is working on looking at alternative sources of fuel and power. The hon. Lady pointed out the example in Orkney; that is what we are working on for the transport decarbonisation plan, which will come forth shortly.

I welcome the Minister’s comments about the impact on smaller regional airports such as Humberside airport, which is based in my Cleethorpes constituency. The impact on the offshore industries and the links to Aberdeen have already been drawn to his attention, but will he also take into account the fact that Flybe works in partnership with other airlines, such as Eastern Airways, which is based in Humberside, and the possible impact of the knock-on effect?

My hon. Friend temps me to go into a great, lengthy answer about franchising arrangements with Flybe, which I am trying not to do, but I very much hear his point and I regularly wade into the detail of that.

The Minister went to school a stone’s throw from Manchester airport in my constituency, but is the voice of northern England being heard? After the Thomas Cook debacle, 2.8 million passengers were taken out of capacity. If this Flybe collapse happens, that will affect 1.8 million passengers out of Manchester airport. I know that people are worried about climate change, but APD was a tax devised by London civil servants in Whitehall cooling towers that crippled the growth of regional airports throughout our country, and we are paying the price for that.

The hon. Gentleman is always a good defender of Manchester airport—I will grant him that. As he will know, ACL determines slot allocation at Manchester. The Thomas Cook slots have already been reallocated among easyJet and Jet2. ACL has the matter in hand. I recognise Manchester’s interest in the process.

Regional connectivity is at the heart of the Government’s agenda, and the impact of Flybe collapsing on its partnerships with other airlines would be quite severe. Can the Minister provide reassurance that the Government will support Flybe until the airline insolvency legislation has come into force?

We are continuing to work hard in Government to give all the support that we can at this stage. I cannot comment further on exactly what is occurring, but I very much hear my hon. Friend’s plea.

Teesside International airport tripled its losses to nearly £6 million under the stewardship of the Tees Valley Mayor last year—after he had paid tens of millions of pounds of taxpayers’ money for it. Flybe is one of the few airlines to provide flights from the airport—44% of them—and is critical to the airport’s future and the Mayor’s plans. The Government failed to intervene when SSI went bust, they refused to provide Sirius Minerals with a loan guarantee to unlock international investment, and they are doing nothing to support Hitachi, which is making 250 people redundant. Are the Government really prepared to continue to fail the Tees valley and to see Flybe collapse, taking regional airports such as Teesside with it?

The hon. Member will not be surprised to hear that I have great confidence in Mayor Houchen’s stewardship of both—

It’s a £6 million loss!

I am not going to get stuck into that. The hon. Member knows that elections are coming and I know that elections are coming—I know what he is up to.

Flybe flies from Leeds Bradford airport in West Yorkshire to the likes of Newquay, Southampton and Belfast. Passengers have very little alternative until we see major investment in regional and cross-country rail. Does the Minister agree that until that happens, we need to keep investing in our regional infrastructure, and we also need to crack on with trans-Pennine rail?

My hon. Friend makes an incredibly important point. When we consider aviation, it is not just about aviation; it is also about links across other modes of transport. He will know that I am the Minister responsible for Northern Powerhouse Rail so I take a very close interest in it, and I am always happy to discuss it with him.

Further to the question from the hon. Member for Cardiff South and Penarth (Stephen Doughty), have the British Government received any direct representations from the Welsh Government following the news this morning?

I am not aware of any representations received.

Following the Monarch and Thomas Cook debacles, what lessons has the Minister learned and which of them will he apply to the situation with Flybe?

I would caution that the cases are not as similar as some might think. I am not going to offer a running commentary, but the Department works hard in collaboration with the CAA to monitor all airlines that operate from this country.

Of course the Government should intervene to safeguard people’s livelihoods and the economy around the country, but on a day on which we have heard about yet another increase in global ocean temperatures, when we know that parts of Australia are burning to a crisp, and when the Government are on target to hit net zero in 2099, not 2050, is it right that a subsidy that supports profitable and successful airlines should encourage and increase air travel, not result in the reductions that are essential if we are to address our commitments to reducing the effects of climate change?

The hon. Gentleman may have heard my answers, but I will try again. I am working hard with the Minister of State, Department for Transport, my hon. Friend the Member for Mid Norfolk, to make the UK a global leader in reducing aviation emissions. The hon. Gentleman may want to wait and see our proposals when they are introduced.

Last but certainly not least, the one and only Jim Shannon.

Mr Speaker, The Bible says that

“the last shall be first, and the first last”.

I shall bear that in mind.

Absolutely—thank you so much. I thank the Minister for his response. He will know that the success of George Best Belfast City airport is down to the Government policy of connectivity and how important that is. It is also down to the success of Flybe. The Minister is probably aware that it flies from Belfast to 14 destinations in the UK—the largest number of any airline company. Some 3,400 jobs depend on Flybe across the United Kingdom, but 100% of those jobs are important to Northern Ireland. In the light of the new dawn in Northern Ireland—the Assembly is up and running, so responsibility falls on its shoulders—has he had an opportunity to speak to anyone in the Assembly such as the First Minister to ensure that Flybe retains its critical position for Northern Ireland?

Naturally I welcome the resumption of Stormont. I note the fact that 68% of passengers at Belfast City are Flybe passengers, so the company is clearly important there. I am in close contact both with the Northern Ireland Office and with the devolved Administration.