Ryanair, which is the largest passenger airline operating to and from the UK today (Thurs, 16 Jan) wrote to Chancellor of the Exchequer, Sajid Javid MP, calling on him to extend the APD eco tax ‘holiday’ given to Flybe, to all of its UK airline competitors including Ryanair, Easyjet and BA, as otherwise this government subsidy to the billionaire owners of Flybe will be in breach of Competition law and State Aid rules.
Ryanair pointed out that the Flybe business model is neither profitable nor viable and has lurched from failure to failure repeatedly over the last 20 years.
Ryanair also pointed out that while the Flybe business model is unsustainable, it is owned by billionaires including Richard Branson, Delta Airlines and Cyrus Capital, who do not need a Government subsidy to prop up their failed airline investments. Ryanair also rejected the false claims made by Andrea Leadsom that Flybe has a ‘viable’ business model when everyone in the industry knows that the Flybe business model is doomed to fail again and again.
Ryanair’s Michael O’Leary said:
“This Government bailout of the billionaire owned Flybe is in breach of both Competition and State Aid laws. The Flybe model is not viable which is why its billionaire owners are looking for a state subsidy for their failed investment.
The reason why Flybe isn’t viable is because it cannot compete with lower fare services from UK regional airports on domestic and EU routes provided by Ryanair, Easyjet, BA and others; and it cannot compete with lower cost road and rail alternatives on many smaller UK domestic routes. If Flybe fails (as it undoubtedly will once this Government subsidy ends) then Ryanair, Easyjet, BA and others will step in and provide lower fare flights from the UK regional airports, as we already have to make up for the recent failure of Thomas Cook Airways.
This Flybe ‘subsidy’ cannot comply with Competition, or State Aid rules unless the same APD eco tax holiday and other Government subsidies are extended to all other UK competitor airlines including Ryanair, Easyjet, BA among others.”