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Flybe on the brink again


Manxberry
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9 minutes ago, Manxberry said:

Deal done, FlyBe saved. I'm sure the shareholders from last year who lost everything will be thrilled by this /s. Also Thomas Cook shareholders /s. 

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19 minutes ago, Nellie said:

Surely, if the UK Government do decide to reduce APD, from, say 1st March, then any passengers who have paid APD, but not yet flown, at that date, will be due a refund.

So, how will this help FlyBE?

Well if you try to reclaim your £13 APD: any tax redemption (namely Air Passenger Duty) on unused tickets will incur a £25.00 (EUR35.00, CHF40.00) Tax Redemption Fee per person per sector.  So you will get a refund of -£12 ie you'll end up paying them.

I presume the idea is that by dropping APD on domestic flights, the airlines will be able to raise their fares by a similar amount.  It's certainly something where the spin seems to be coming from the government rather than the airline or the BBC because the Guardian has a similar story where the two element (the delay for Flybe and the reduction) seem to be confused in the same way.   Presumably neither Government spin doctors nor the media really know what they are talking about.

I suspect the UK are also trying to find a 'win' from Brexit (they couldn't do t when in the EU without also reducing APD for the rest of EU/EEA).  In 2018 about 5.6 million of Flybe's 8 million pax were domestic.  Take off IOM, CIs and other oddities such as infants and it would still be 5 million @ £13.

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2 minutes ago, Roger Mexico said:

I presume the idea is that by dropping APD on domestic flights, the airlines will be able to raise their fares by a similar amount.  It's certainly something where the spin seems to be coming from the government rather than the airline or the BBC because the Guardian has a similar story where the two element (the delay for Flybe and the reduction) seem to be confused in the same way.   Presumably neither Government spin doctors nor the media really know what they are talking about.

Don't know where the "£100m tax bill" comes from, further conflation of various issues, possibly.

If APD is ditched, it will apply to all domestic carriers.  If they all then increase their prices by £13 per sector, would that count as price fixing?

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Looks like HRMC were already helping them out by offering them an annual return rather than the monthly return that is required of everyone else. https://www.gov.uk/money/air-passenger-duty

I see FlyBe do 350,000 passengers through Ronaldsway, so ~175,000 departing passengers all paying £13 a go is £2.25 million they must owe the IOM Government. 

 

Seems corrupt to me, offering one airline something that others don't get. 

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29 minutes ago, Bobbie Bobster said:

A commentard on the ever-reliable pprune.org says the following which seems to be the clearest summary I have seen:

image.png.89f62b67169fbdf01f2ab783ae6efff2.png

Can’t be correct. 

1. Stobart put next to no money into Connect. It’s part of the deal was to inject some of its, profitable, airline assets. 

2. Cyrus and Virgin were to put funds in, £100million.

3. The £2million bought the shares in flybe. That was value after taking account of debts and assets, ie slots. 
 

4. Connect cannot just sell the slots and take the money and run. The money would go to flybe to pay off its debts.

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1 hour ago, Roger Mexico said:

Well if you try to reclaim your £13 APD: any tax redemption (namely Air Passenger Duty) on unused tickets will incur a £25.00 (EUR35.00, CHF40.00) Tax Redemption Fee per person per sector.  So you will get a refund of -£12 ie you'll end up paying them.

 

I'm aware that's the routine if you cancel a booking and try to reclaim the APD component..

But if UK Govt. reduce the rate of APD would be a different scenario. It FlyBe, and any other airlines  holding forward booking didn't refund APD, they collected for future flights, then the total amount retained by the airlines would effectively be a subsidy from the Treasury. 

That said, I suppose the Treasury could write the regulations in such a away that passengers pay the tax applicable when you book, not when you fly, although that seems morally dubious.

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3 minutes ago, Nellie said:

That said, I suppose the Treasury could write the regulations in such a away that passengers pay the tax applicable when you book, not when you fly, although that seems morally dubious.

That's the way it works already, if you think about it.  If you book an advance ticket and the APD rate is then announced to rise before you travel,  you don't have to pay any extra provided the sector has been ticketed, which I think is the tax date for the transaction.  In most cases that will be when the flight is booked.

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