* PM says government working hard to do what it can
* Officials meet to discuss possible domestic flight tax cut
* Flybe flights operating as normal
(Adds junior minister, Greenpeace comments)
By Sarah Young
LONDON, Jan 14 (Reuters) - Stricken regional airline Flybe
is important for Britain's transport links and the government
will do what it can to help the company, Prime Minister Boris
Johnson said on Tuesday, as government officials met to decide
the airline's future.
With Flybe's finances at breaking point, Transport Minister
Grant Shapps is holding talks about potentially cutting air
passenger taxes on all domestic flights to help it survive.
"It is not for government to step in and save companies that
simply run into trouble, but be in no doubt that we see the
importance of Flybe in delivering connectivity across the whole
United Kingdom," Johnson told BBC television.
"We're working very hard to do what we can."
Flybe's flights operated as normal on Tuesday, a day after
reports emerged suggesting it needed to raise new funds to help
it survive through the winter when demand for travel is lower.
Negotiations could lead to a cut to air passenger duty
(APD), said the BBC, and a possible deal to allow Flybe to defer
a payment of more than 100 million pounds ($130 million) for
three years, said Sky News.
But talk of tax cuts for flying was met with anger from
environmental groups.
Under the rescue deal being discussed, Flybe's owners, a
group which includes Virgin Atlantic and which spent tens of
millions to help rescue Flybe last year, would be required to
invest tens of millions more of new equity.
Flybe has declined to comment on its finances and the talks
about its future.
Any government assistance would need to avoid breaching
European Union rules on state aid. A form of short-term funding
is one option the government is considering, said the BBC.
A junior transport minister said he could not provide
lawmakers with any further details, when responding to an urgent
question about the airline in parliament.
CONNECTIVITY PROMISE
Rumours about the possible demise of Flybe have heaped
pressure on Johnson's newly elected government. In December, his
Conservative party won seats across regions served by Flybe,
helped by a promise to improve transport links outside London.
Flybe's network of routes include more than half of UK
domestic flights outside London. Based in Exeter, south west
England, it carries eight million passengers a year between 71
airports in the United Kingdom and Europe.
The aviation industry has long opposed APD, a tax of at
least 13 pounds levied on passengers departing from UK airports
that raised about 3.7 billion pounds for the government in
2018/19.
Flybe has said its business is disproportionately harmed by
the tax as it makes its flights more expensive versus rail and
road competitors, because passengers travelling on return
flights within the UK will pay it twice.
Greenpeace and other environmental groups, however, reacted
angrily to suggestions the government could help encourage
flying.
"The government cannot claim to be a global leader on
tackling the climate emergency one day, then making the most
carbon-intensive kind of travel cheaper the next," said
Greenpeace chief scientist Doug Parr.
Flybe has 68 aircraft and about 2,000 staff and was bought
last year by Connect Airways, a consortium created by Virgin
Atlantic, Stobart Group and investment adviser Cyrus
Capital.
Should Flybe collapse, it would be the second high-profile
failure in Britain's travel industry in less than six months
after Thomas Cook went into liquidation last September,
stranding thousands of passengers.
($1 = 0.7699 pounds)
(Reporting by Sarah Young; editing by Kate Holton and Mark
Potter)
