A budget airline that services United Kingdom and European destinations has announced that it may sack around 300 staff, approximately 10 per cent of current UK based employees.
Flybe’s Chief Executive, Jim French, said that the decision was ‘not taken lightly’ by the airline’s board.
“[It’s a decision that]e we have tried to avoid and it is the first time in almost 30 years of business that we have had to take such action. However, faced with the brutal impact of a 160 per cent rise in Air Passenger Duty over the past six years and the consequent 20 per cent decline in domestic traffic over the same period, we have to recalibrate the business.
“There is no escape from the £68 million per annum APD tax burden which Flybe has to pay as a result of increases successive governments have levied on the industry. Flybe now pays more than 18 per cent of our ticket revenues to the government in Air Passenger Duty, whilst other UK based carriers who operate a greater proportion of their business outside of the UK pay less than 6 per cent,” he said.
It is expected that the majority of the proposed redundancies will, following consultation, come from Flybe’s Exeter HQ, Manchester and Newcastle.
Mr. French added that any significant change to either the UK Economy or the redistribution of APD was likely to be some way off.
“[The a]nnouncement represents a clear and realistic plan with a measurable timescale and benchmarks, based upon significant restructuring and cost reduction to return Flybe to profitability,” he said.
The strategy is intended to reduce costs by £35 million annually and was announced to the London Stock Exchange. The carrier said that there would be no change to the current route network.
The Air Passenger Duty has come under intense criticism from the tourism industry throughout the world. Caribbean tourism bodies including the Caribbean Tourism Organisation and Caribbean Hotel and Tourism Association have condemned the UK-based levy as unjust because the region is placed in the highest band of duty despite being closer geographically than many American destinations on the West Coast.