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Flybe says it will get a tax and duty holiday

By Ramla Soni

The UK regional carrier has agreed a payment plan with HMRC for 'less than £10m'

Flybe has denied claims it received a payment holiday of up to £100 million ($130m, €117m) from the UK government.

The UK regional carrier said it has agreed a payment plan with HM Revenue and Customs (HMRC) for "less than £10m" which would take a "matter of months" before the tax and duties are paid off.

The airline said the move was "a standard" pay arrangement with HMRC that a business in "financial difficulty" may use.

This comes after the UK government said this week that it is considering measures to save Flybe from collapse, including short-term funding and cutting air passenger duty (APD) on all domestic flights.

Flybe's owners Richard Branson's Virgin Atlantic, Stobart Group and Cyrus Capital have agreed to invest £30 million into the airline.

Ryanair's chief executive Michael O'Leary said he would sue the government if air passenger duty concessions granted to Flybe are not extended to other airlines.

British Airways-owner IAG has also filed a complaint with the EU, arguing the rescue breaks state aid rules.

At the same time, Flybe will end its route from Newquay to Heathrow, Europe's busiest airport. The London service will revert to Gatwick, which has fewer connections, at the end of March.

The Newquay-Heathrow route was launched on 31 March 2019.

FURTHER READING: UK government considers measures to save Flybe

FURTHER READING: Flybe says it is operating as usual despite cash crunch reports

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