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U.K. might take a stake in Flybe

Flybe Bombardier Q400
Flybe Bombardier Q400, © Bombardier

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LONDON - Rescue loans for troubled regional airline Flybe may result in the British government taking a stake in carrier.

Flybe might receive up to 100 million pounds in credit facilities from government to avoid collapse. Even after Brexit the U.K. and the European Commission negotiate the terms for this aid.

According to BBC, the U.K. wants to avoid charging market rates on the loans as high interest payments might impair Flybe`s return to profit.

This might result in a "warrant" arrangement, under which the government can convert its loans into airline equity at a discounted share price later on.

This scenario is considered "possible", BBC reports. IAG and Ryanair voiced their opposition against government help for Flybe. Along with loans Flybe is also set to receive taxpayer subsidies on certain routes.
© | 14/02/2020 09:49

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