Flybe

[Silvercity]

There seems to be a view that the 'new' Flybe, whatever it's to be called, will see a primary role as a feeder for Virgin's long haul routes. If that is so and with Manchester having a sizeable Virgin long haul presence there must be a good chance that CWL will see a MAN link.

EXT's MAN link has carried 130,000 passengers in both of the last two years, making it that airport's busiest route - well over twice as busy as the next one in the list. 130,000 would have been CWL's second buiest route in 2018.

If CWL did get a MAN route I'm not saying it would handle 130,000 pa because for a start EXT has probably been feeding Flybe's short-haul routes at MAN, some of which might not operate if the new owners reorganise the airline's raison d'etre. Nevertheless, a MAN route could still generate a substantial number of passengers which would go some way to compensating for the passenger number reduction that will come about if Flybe does axe some of its current CWL routes. It would also be another hub airport of sorts from CWL.

I wonder if they want to feed Virgin flights from MAN they might move to term 2 there. It's a fair treck from terminal 3 to 2 otherwise.

 

[Jerry]

Easyjet from Bristol are increasing Belfast and Glasgow flights no doubt on the news of flybe from Cardiff bloody shame Bristol going to gain alot from this

Welcome to forums4airports.
I think any increases from Easyjet will come in the winter and as TLY says they might not be bothered and just content with selling out the flights they have.

What will be interesting to see is if Flybes prices go up for the routes that they may offer as I'd imagine that any discounts they had fees wise probably will end with the termination of the basing deal.

 

[Jerry]

£100,000,000??? I don't know where they got the figure from. https://penarthnews.wordpress.com/2...00000000-that-welsh-labour-invested-in-flybe/

 

[Charterman]

Unfortunately, the article is poorly written and factually incorrect. The figure actually 'invested' is a small fraction of that.

I think the 'journalist' has got confused with the number of 0's..

 

[Jerry]

Unfortunately, the article is poorly written and factually incorrect. The figure actually 'invested' is a small fraction of that.

I think the 'journalist' has got confused with the number of 0's..

I haven't been able to read the article yet but the impression i get from social media is that the number has come from Andrew T Davies and most likely includes the purchase price and any grants and loan facilities to the airport as a whole.
Lets face it for £100 million they probably could have bought Flybe!

 

[TheLocalYokel]

It was in November last year that Penarth Conservative AM Andrew R T Davies first revealed that more that £100,000,000 of taxpayers' money was “loaned” to Flybe by the Welsh Labour Government via Cardiff Airport – and that Cardiff Airport itself was “chartering” several of Flybe’s aircraft.

The above is the relevant piece of the article. I can't remember AM Davies's revelation about £100,000,000 of tax payers' money being loaned to Flybe. I was out of the country for most of last November so might have missed it but it seems an incredible sum. A brief Google search has failed to find any reference to this. The publicly quoted figure (although not officially) is usually £5 million given to Flybe as commercial inducements as part of Project Blackbird.

I did say in a recent post that there might be political ramifications if the WG finds it necessary to offer substantial inducements to other airlines if Flybe really does leave CWL in a hole. Nevertheless, it might have to be done.

The WG's transport minister is kidding himself if he believes that the public will accept that the WG has no say in the running of CWL because it is operated by an arms'-length WG-owned company.

 

[Jerry]

Apparently yesterday Ken Skates has said that refusal to devolve APD by the UK government would've prevented Flybe from withdrawing the base.
Is the UK government partially responsible?

 

[Jerry]

The WG's transport minister is kidding himself if he believes that the public will accept that the WG has no say in the running of CWL because it is operated by an arms'-length WG-owned company.

They definitely had a say when came to Qatar Airways and people will hold them ultimately responsible for what happens at the airport.

 

[superking]

Apparently yesterday Ken Skates has said that refusal to devolve APD by the UK government would've prevented Flybe from withdrawing the base.
Is the UK government partially responsible?

Or a easy excuse for Flybe got it all wrong. You cant blame all of Flybe problems on CWL as there is a lot of other bases in the UK. I recon down to bad running of the airline. and wrong decisions made about many things.

 

[Jerry]

Or a easy excuse for Flybe got it all wrong. You cant blame all of Flybe problems on CWL as there is a lot of other bases in the UK. I recon down to bad running of the airline. and wrong decisions made about many things.

Not talking about that I'm talking about their withdrawal of the base. If APD had been devolved then it could be possible that Flybe's thinking could've changed and Cardiff deemed more important to base aircraft resulting in the base remaining even if it was Q400s just based.

 

[TheLocalYokel]

Not talking about that I'm talking about their withdrawal of the base. If APD had been devolved then it could be possible that Flybe's thinking could've changed and Cardiff deemed more important to base aircraft resulting in the base remaining even if it was Q400s just based.

He's a politician. It's something to try to deflect the political and other criticism of the WG's decision to invest money in Flybe's presence at CWL - something incidentally that I believe was absolutely the right thing to do at the time as Flybe was just the right airline to take CWL forward as it seemed then.

Unless Flybe's new owners told him that they would have stayed, and if they did they could say so publicly as Ryanair did when they said how nil APD at CWL would help them, then I am always reluctant to believe a politician when they have a vested interest in what they are saying.

Why though would Flybe speak to him when he said the WG has nothing to do with running CWL?

 

[Jerry]

Why though would Flybe speak to him when he said the WG has nothing to do with running CWL?

Makes you wonder if he should've been more involved at least by speaking to the Flybe CEO regularly to check that they are happy. I have a feeling he probably does with Qatar Airways.

It does make me wonder though if Flybe would've stayed if APD had been devolved. Guess no one will ever know though.

 

[Charterman]

It was in November last year that Penarth Conservative AM Andrew R T Davies first revealed that more that £100,000,000 of taxpayers' money was “loaned” to Flybe by the Welsh Labour Government via Cardiff Airport – and that Cardiff Airport itself was “chartering” several of Flybe’s aircraft.

The above is the relevant piece of the article. I can't remember AM Davies's revelation about £100,000,000 of tax payers' money being loaned to Flybe. I was out of the country for most of last November so might have missed it but it seems an incredible sum. A brief Google search has failed to find any reference to this. The publicly quoted figure (although not officially) is usually £5 million given to Flybe as commercial inducements as part of Project Blackbird.

I believe the 'quote' was taken from a walesonline article, which as is often the case, factually incorrect. The 'loan' awarded to flybe would represent less than 10% of the figure quoted, and is likely to account for £2-3 per seat available.

Government often makes decisions based on many factors, including job creation. The flybe base created 50-60 direct jobs, and I am pretty certain the welsh government did not commit to Flybe to the tune of £2million per job!

APD is a smokescreen i'm afraid, you can't make the argument that if APD had been devolved then it would have saved CWL. There are far too many factors in play (catchment, demand, marketing, how flybe are perceived by the public). But mostly, this decision was a result of decisions made many years ago when they made their fleet plans!
Ultimately, CWL was compared with the other bases (on the same APD terms) and was considered best for the chop.

Would just like to take a moment to wish all the best to all the Flybe crew affected by the latest cost-cutting measures. My experience of those based at CWL was very positive and it will be a shame to see them go. I wish them all the best in their new ventures and I know a few are already moving on to new things.

 

[Seasider]

They could struggle to crew flights around late August/early September if staff have got other jobs and not waited until they are made redundant.

 

[TheLocalYokel]

I believe the 'quote' was taken from a walesonline article, which as is often the case, factually incorrect. The 'loan' awarded to flybe would represent less than 10% of the figure quoted, and is likely to account for £2-3 per seat available.

Government often makes decisions based on many factors, including job creation. The flybe base created 50-60 direct jobs, and I am pretty certain the welsh government did not commit to Flybe to the tune of £2million per job!

APD is a smokescreen i'm afraid, you can't make the argument that if APD had been devolved then it would have saved CWL. There are far too many factors in play (catchment, demand, marketing, how flybe are perceived by the public). But mostly, this decision was a result of decisions made many years ago when they made their fleet plans!
Ultimately, CWL was compared with the other bases (on the same APD terms) and was considered best for the chop.

Would just like to take a moment to wish all the best to all the Flybe crew affected by the latest cost-cutting measures. My experience of those based at CWL was very positive and it will be a shame to see them go. I wish them all the best in their new ventures and I know a few are already moving on to new things.

Many thanks for your response. Some food for thought.

 

[Jerry]

APD is a smokescreen i'm afraid, you can't make the argument that if APD had been devolved then it would have saved CWL. There are far too many factors in play (catchment, demand, marketing, how flybe are perceived by the public). But mostly, this decision was a result of decisions made many years ago when they made their fleet plans!
Ultimately, CWL was compared with the other bases (on the same APD terms) and was considered best for the chop.

What it could've done is changed the conversation and Flybe's view of CWL and it's importance within their network. As an example would Newqauy have a base if the PSO for the London route wasn't there. In the end APD or not if Flybe felt Cardiff was important enough to their network they would've found the aircraft to base at CWL, they obviously don't see it as important enough even with any potential subsidies from the airport.

 

[TheLocalYokel]

What it could've done is changed the conversation and Flybe's view of CWL and it's importance within their network. As an example would Newqauy have a base if the PSO for the London route wasn't there. In the end APD or not if Flybe felt Cardiff was important enough to their network they would've found the aircraft to base at CWL, they obviously don't see it as important enough even with any potential subsidies from the airport.

That's a fair point about Newquay. DSA is in the same boat as CWL with Flybe, and DSA has no chance of an 'APD dividend' because the current Westminster government has made it clear that it will not abolish the tax. Furthermore, Labour's shadow has said much the same thing recently.

We will probably never know now, but a good test would have been an extension of CWL's PSO routes which the WG wanted and I believe still wants. They would have had no inducements other than 'modest marketing' with the only carrots being a four-year exclusivity and no APD as they are PSO routes. We would then have known if the lack of APD was enough to operate routes that were otherwise not viable commercially.

On a 88-seat E170 a full load of adults would generate £1144 per flight on a short-haul route. It's unlikely that every flight would be full or that everyone on board would be 16 or over, so the take would probably average out at something less than £1,000 per flight. I don't know whether that would be enough to create a satisfactory yield where with APD the yield would be unacceptable.

 

[Jerry]

That's a fair point about Newquay. DSA is in the same boat as CWL with Flybe, and DSA has no chance of an 'APD dividend' because the current Westminster government has made it clear that it will not abolish the tax. Furthermore, Labour's shadow has said much the same thing recently.

I do think what is a disadvantage to Cardiff is that a London route isn't viable from here. It does seem that Flybe's focus is turning more towards London (especially Heathrow) than the regional airports and on some of those routes they seem to be getting government assistance for it. The winter schedule will be interesting.
The one thing the Flybe base did do is help CWL to grow and give CWL some positivity. Only time will tell how much damage that closing the base will do to CWL but even with the Flybe news Summer 2019 will still be positive.

 

[Charterman]

What it could've done is changed the conversation and Flybe's view of CWL and it's importance within their network. As an example would Newqauy have a base if the PSO for the London route wasn't there. In the end APD or not if Flybe felt Cardiff was important enough to their network they would've found the aircraft to base at CWL, they obviously don't see it as important enough even with any potential subsidies from the airport.

Absolutely, I agree. Personally i'd love to see APD devolved to Wales but without getting too political, I don't trust either the WAG or the UK government to make any logical decisions at the moment, they're far too busy playing for career advancement rather than doing good for the country!

That's a fair point about Newquay. DSA is in the same boat as CWL with Flybe, and DSA has no chance of an 'APD dividend' because the current Westminster government has made it clear that it will not abolish the tax. Furthermore, Labour's shadow has said much the same thing recently.

On a 88-seat E170 a full load of adults would generate £1144 per flight on a short-haul route. It's unlikely that every flight would be full or that everyone on board would be 16 or over, so the take would probably average out at something less than £1,000 per flight. I don't know whether that would be enough to create a satisfactory yield where with APD the yield would be unacceptable.

The logical thing for the UK government to do would be to have APD on a sliding scale. Encourage growth at smaller, under-utilised airports by reducing the APD payable on a sliding scale relative to the percentage growth opportunity. Then increase the APD payable on a sliding scale for the over-utilised major airports. Even a minor re-distribution of capacity would have major effects for the local economies of those airports which are under-utilised, and the UK government would like still be collecting similar revenues to now. No doubt this idea has flaws but thought it would be a good point for discussion anyway.

 

[TheLocalYokel]

Absolutely, I agree. Personally i'd love to see APD devolved to Wales but without getting too political, I don't trust either the WAG or the UK government to make any logical decisions at the moment, they're far too busy playing for career advancement rather than doing good for the country!



The logical thing for the UK government to do would be to have APD on a sliding scale. Encourage growth at smaller, under-utilised airports by reducing the APD payable on a sliding scale relative to the percentage growth opportunity. Then increase the APD payable on a sliding scale for the over-utilised major airports. Even a minor re-distribution of capacity would have major effects for the local economies of those airports which are under-utilised, and the UK government would like still be collecting similar revenues to now. No doubt this idea has flaws but thought it would be a good point for discussion anyway.

https://assets.publishing.service.g...f_air_passenger_duty_on_regional_airports.pdf

In 2015 HM Treasury published a discussion paper on options for supporting English regional airports from the impacts of air passenger duty devolution (see above link).

The paper looked at devolving APD within England; varying APD rates within England; providing aid to regional airports within England.

The sticking point with the first two is that, as long as the UK remains within the EU or leaves with a deal that somehow incorporates a continuation of the single market in any leaving agreement, the UK will almost certainly have to continue to comply with EU regulations including state aid.

The 'Azores criteria' stipulates that for tax powers to be devolved by a member state to a regional authority, that regional authority must bear a sufficient degree of fiscal and autonomy from central government (the necessary degree of the autonomy is outlined in greater detail within the discussion paper). The Welsh and Scottish governments clearly have a sufficient degree of autonomy for tax devolution - they aren't regional authorities as we think of such bodies but have already had some tax powers (but not yet APD in Wales) devolved to them by the member state, ie the UK.

Regional or combined authorities in England don't have that autonomy at the moment and their budgets and powers would have to be greatly increased for them to be so regarded. The current West of England Combined Authority for example has a budget of £30 million a year which is little more than half the APD that BRS generates each year. The BRS APD equivalent would be deducted from central government funding if that authority axed APD, leaving it minus around £20 million each year instead of plus £30 million.

The same hurdles apply to varying APD within England although the Treasury did muse in its paper that it might be possible to vary APD within England according to airport congestion and remain within EU rules. The paper spoke of seeking the EC's views but I'm not aware that the Treasury ever did ask.

The third leg of the paper is not directly relevant to APD so I'll leave that although it is discussed within the linked paper if anyone wants to read it.

Clearly this paper was produced on the basis that APD would be devolved to the three national governments within the UK. Apart from the state aid difficulties, the problems that the Treasury sees and quoted within the paper (the additional burden of tax collection and consequences on some airports for example) seem to be why the question of Welsh APD devolution remains in the long grass.