Reasons to be cheerful?

In the past week regional aviation has seen both highs and lows – highlighting just how challenging a sector this can be as well as the opportunities to be optimistic.

In the UK, regional airline Flybe (soon to become Virgin Connect) faced uncertainty as it tried to secure a future. The airline negotiated a rescue deal with the government and shareholders, with Lucien Farrell, chairman of Connect Airways, commenting on the recognition of the “importance of Flybe to communities and businesses across the UK”.

The government also confirmed it would be reviewing Air Passenger Duty (APD) “to ensure regional connectivity is strengthened while meeting the UK’s climate change commitments to meet net zero by 2050.” The UK’s APD is the highest European aviation tax for both short-haul and long-haul flights.

The rescue deal was criticised by several industry executives, however, including Ryanair’s Michael O’Leary who called for the Chancellor of the Exchequer to “extend the APD eco tax ‘holiday’ given to Flybe, to all of its UK airline competitors.”

He said the bailout is “in breach of both Competition and State Aid laws,” and argued that the Flybe model is not viable: “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.”

Despite this, we can be sure the announcement that Flybe will continue to operate as normal would have been welcome news to its 2,400+ employees.

Elsewhere, airlines have been showing their dedication to enhancing regional connectivity, as low-fare leisure carrier Allegiant announced its largest service expansion in company history. Most of the 44 new routes announced by the airline are non-competitive, with no other airline providing service between those airports.

Meanwhile in north Germany, Lübeck Airport is anticipating the return of scheduled services later in 2020 as it prepares to launch a new regional airline, Lübeck Air. The airline will use an ATR 72-500 to connect the city to Munich and Stuttgart.

Scheduled services at the airport ceased in 2016 and so the launch of Lübeck Air will bring commercial services to the airport once again.

The LARA team will be making some journeys of its own this week to attend Airfinance Journal Dublin. Please get in touch if you would like to arrange a meeting or keep an eye out for our team at the show!