Political Signals From The Flybe Rescue Deal

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This week, the Government stepped in to save the regional airline, Flybe, from collapse. Having won a majority by gaining votes in nearly every region of the UK, the intervention symbolises Boris Johnson’s stated desire to ‘level up’ the country.[1] The decision indicates the Government’s willingness to adopt a more interventionist approach in pursuit of this aim and tells organisations there will be opportunities to push for support.

A ‘BREXITY-HEZZA’ FELT COMPELLED TO ACT

Free-market Tories are not usually in the habit of supporting ailing businsess. In September last year, the Government saw another airline, Thomas Cook, fold without offering assistance.[2] There were structural differences between the two businesses, of course. However, it is clear that a Prime Minister who has likened his template to that of Michael Heseltine’s,[3] a champion of regional regeneration, did not want to be seen to ignore a service that connects places such as Belfast, Newcastle, Newquay, Aberdeen, Exeter, Cardiff and Birmingham.

Source: Airline Route Maps[4]

A PRIORITY OF NARRATIVES WILL NOT PLEASE EVERYONE

A key element of the rescue package has seen the Government defer some of Flybe’s Air Passenger Duty (APD) which has angered competitors.[5] The Secretary of State for Transport, Grant Shapps MP, has also announced that the Government will conduct a review of APD.[6] This is a move which has drawn strong criticism from environmental groups because flights need to be discouraged if the UK is to meet its net-zero carbon target.[7]

GET WITH THE PROGRAMME TO GET AHEAD

Ultimately, the Government’s resolve to appear committed to all areas of the UK trumped other concerns. As a Conservative MP is reported to have said: ‘This Government just works out what people care about and does it.’[8] With the Treasury poised to announce £100 billion of capital spending in the Budget in March[9], organisations need to present themselves as enablers of the Government’s core ambitions to successfully lobby for support.

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[1] Boris Johnson MP, 13 December 2019, link

[2] BBC News, 23 September 2019, link

[3] Prospect, 7 January 2020, link

[4] Airline Route Maps, link

[5] City AM, 15 January 2020, link

[6] Department for Transport and The Rt Hon Grant Shapps MP, 15 January 2020, link

[7] Committee on Climate Change, 24 September 2019, link

[8] Huffington Post, 15 January 2020, link

[9] Conservative Party, Conservative and Unionist Party Manifesto 2019, link

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