Sky News has learnt that Andrea Leadsom and Grant Shapps will meet Mr Javid to discuss the proposed terms of a bailout of one of Britain's largest regional airlines. Insiders said that the government had informed Flybe's three shareholders that they would be required to inject "tens of millions of pounds" in fresh equity into the company as a condition of any deal. Under the proposals, Flybe, which carries eight million passengers annually, would be allowed to defer this year's estimated air passenger duty (APD) bill of £106m for three years.
However, people close to the process warned on Monday night that there was considerable urgency surrounding the talks between the owners of Connect Airways, Flybe's parent, and the government. "There is no guarantee that the company will be saved," said one. "The survival prospects have improved but Its not out of the danger zone." A decision is expected to be taken about deferring Flybe's APD liability during the course of Tuesday. Whitehall sources say they are confident that such a move would not breach EU state aid rules or UK tax law, and that the primary consideration is an assessment of whether the company will ultimately repay the APD it owes.
Virgin Atlantic, Stobart Group and Cyrus Capital Partners, which collectively took control of Flybe's assets last March, are understood to have resolved in principle to commit the capital being sought by the government as a condition of a rescue deal.
Sky - Cabinet trio to thrash out £100m Flybe rescue package