The government has agreed on a rescue plan for the problematic regional airline Flybe.
Ministers agreed to work with Flybe to develop a payment plan for a significant tax debt that is estimated to exceed £ 100 million.
Meanwhile, the owners of the firm have agreed to inject more money into the airline with losses.
The business secretary, Andrea Leadsom, said the agreement would keep the company running.
That will be a relief for many of the eight million passengers who fly with the airline every year.
Flybe serves dozens of national routes in the United Kingdom that are not operated by other airlines, making it the largest airline flying from some regional airports such as Newquay.
“Flybe plays a fundamental and unique role in the UK aviation system, supporting the development of the regions, providing essential connectivity to businesses and stimulating trade growth,” the head of the Operators Association of the Airport, Karen Dee The rescue agreement.
As part of the agreement, Flybe shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the business.
The government has promised to review the £ 26 air passenger tax that applies to national return fights in the United Kingdom, which has added to the airline’s losses.
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“Delighted to have reached an agreement with Flybe shareholders to keep the company running, ensuring that the UK regions remain connected,” Leadsom tweeted.
“This will be good news for Flybe staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”
Lucien Farrell, president of Connect Airways, owner of Flybe, said the group had agreed to “keep Flybe flying with additional funds along with government initiatives.”
“We are very encouraged by recent developments, especially the government’s recognition of the importance of Flybe for communities and businesses throughout the United Kingdom and the desire to strengthen regional connectivity,” he said.
Transportation Secretary Grant Shapps said the government had worked closely with Flybe to ensure their planes could continue flying.
He said the Department of Transportation will carry out an urgent review that will seek to assess how it can improve regional connectivity and ensure that airports continue to operate throughout the country.
But the possibility of reducing flight taxes has angered climate activists who argue that flying is the most carbon-intensive mode of transport.
Green Party deputy Caroline Lucas said reducing air passenger service was “totally inconsistent with any serious commitment” to face climate change.
“Domestic flights should be reduced, not made cheaper,” he wrote on Twitter.
But the government has said that the tax revision will be consistent with its zero carbon objectives.
The British Association of Airline Pilots, a union, welcomed the news.
“This is good news for 2,400 Flybe employees whose jobs are insured and for regional communities that would have lost their air connectivity without Flybe,” Secretary General Brian Strutton said in a statement.
Flybe, which flies to 170 different destinations, has been struggling under the weight of an estimated bill of £ 106 million for air passenger service, as well as a slowdown in demand that has affected the airline’s finances.
Carrier chief Mark Anderson said: “This is a positive result for the United Kingdom and will allow us to focus on delivering to our customers and planning for the future.
“Flybe is made up of an incredible team of people, serving millions of loyal customers who rely on the vital regional connectivity we provide.”