Continued from page 80
APD for all UK carriers”. Domestic flights currently carry a double APD burden with the £13 tax levied on both legs of a return flight. The Treasury said the review would aim “to ensure regional connectivity is strengthened while meeting the UK’s climate change commitments”. Connect Airways chief
executive Mark Anderson, who took over running Flybe in June and plans to rebrand the carrier as Virgin Connect this spring, confirmed HMRC had agreed to defer payment of some of Flybe’s outstanding APD bill. This was widely reported
to be a deferment of the £106 million bill for last year. However, Anderson rebutted this in a message to staff, saying the deferment was of less than £10 million and “will only last a couple of months before all taxes are paid in full”. Such ‘time to pay’ arrangements are not unusual. The DfT confirmed “an urgent
review into . . . strengthening regional connectivity”, but redirected queries about a possible government loan to Flybe to BEIS, which declined to comment. However, Anderson confirmed
BEIS is considering “a commercial loan, the same as any loan from any bank”. This would have to be on commercial terms to avoid contravening EU state aid rules. Flybe’s owners agreed in return
to invest “more than £30 million” in extra funds. The Stobart Group confirmed the investment in a release to investors, confirming it would contribute £9 million in “short-term funding, with the funds drawn down only if required”. Virgin Atlantic and
Flybe declined to comment. i Rival airlines outraged, page 79
Embattled carrier SAA insists flights operate as normal
South African Airways (SAA) denied it is at imminent risk of failure and insisted operations continue “as normal” on Monday. Amid media reports of flights to
Cape Town, Durban and Munich being cancelled, SAA insisted in a statement that “flights to all destinations continue as normal”.
However, SAA said: “There may
be flight schedule amendments. Operational changes will be managed in accordance with industry norms and practices.” The flag-carrier has been in
trouble for months, having not made a profit since 2011, and the government has made ending the bailouts a priority. SAA had been due to receive
two billion rand ($138 million) in emergency government funding on Sunday, with the same amount due from private lenders. However, South African media reported the
South African Airways
Treasury refused to provide the funds without guarantees. A Department of Public
Enterprises spokesman said: “We are determined to break with the past patterns of bailouts.” No one from SAA was available
for comment.
Delta posts $4.8bn profit after ‘outstanding year’ 7.5%
Ian Taylor
Delta Air Lines declared a record annual profit of almost $4.8 billion aſter tax last week. The US carrier, joint owner of
Virgin Atlantic, reported a 30% rise in pre-tax profits to $6.2 billion, reduced to $4.77 billion after tax – 21% up on the $3.9 billion for 2018. Delta said a record $1.6 billion
Ed Bastian
in profits would be shared between the airline’s 90,000 staff. The carrier returned $3 billion to shareholders over the course of last year. It reported a 6% rise in passenger
numbers to 204 million and a corresponding 6% increase in passenger revenue. Total revenue rose 7.5% on 2018 to $47 billion, with premium ticket revenue up 9%. Delta chief executive Ed Bastian
said: “2019 was a truly outstanding year on all fronts – the best in Delta’s history operationally, financially and for our customers.” Airline president Glen Hauenstein
said: “Demand trends remain healthy and we expect momentum to continue in 2020.” The one negative in the carrier’s
annual results was a 0.5% fall in revenue across the Pacific in the final quarter of 2019 which Delta blamed on “continued softness in China”. The carrier reported total
spending on travel agents’ “commissions and other selling
78 23 JANUARY 2020
Increase in Delta’s revenue, to $47 billion
expenses” in 2019 as $1.99 billion, up 3% on 2018. Distribution was the sixth-largest item of expense but accounted for less than 5% of total operating expenses. Salaries and fuel made up half Delta’s operating costs. Delta acquired a 49% stake in
Virgin Atlantic in 2012 and the carriers launched a transatlantic joint venture in 2014. Air France-KLM joins the venture this month after gaining regulatory clearance last year. Air France-KLM had also been
due to acquire a 31% stake in Virgin Atlantic for £220 million this month, ending Sir Richard Branson’s control of the airline. But this part of the deal was dropped in December after the US granted the partnership anti-trust immunity.
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