Flybe CEO Mark Anderson has confirmed that the airline is in talks with the UK government over a loan but denies that it would constitute a bailout.
Flybe chief executive officer (CEO) Mark Anderson said that the airline is currently negotiating with the government over a loan but emphasized that the financial support is not a bailout.
Anderson assured Flybe employees that the airline had had a few “difficult days” this week but it still had “a great future”. He mentioned that the company’s turnaround plan had started to work and that the airline would be making a big profit given more time.
He said: “We are in conversation with the government around a financial loan – a loan, not a bailout – a commercial loan, but that is the same as any loan we’d take from any bank.”
“The government will not lend if they do not believe there is a credible plan. No-one is going to throw good money after bad,” Anderson pointed out.
He also mentioned that the airline had had “legacy issues” to deal with that had not been apparent to the group of investors led by Virgin Atlantic who bought the airline early last year.
Government rescue contravenes competition rules?
Rival airlines have expressed concern over the government’s role in helping Flybe. They have called for more details of the government assistance to be made public. They argued that the government’s assistance for the regional carrier may violate competition rules.
In a letter to the Chancellor of the Exchequer, Sajid Javid, Ryanair CEO Michael O’Leary threatened to take legal action over the state rescue of Flybe as it violates competition rules.
O’Leary argues that government measures being extended to Flybe should also be given to the airlines. If they are not, O’Leary said Ryanair will launch legal proceedings against the government.
Similarly, British Airways’ owner IAG has already filed a complaint with the European Union (EU), arguing that the Flybe rescue breaches state aid regulations.