Strategy & Operations » Leadership & Management » Flybe chairman calls for government decision on Heathrow expansion

Flybe chairman calls for government decision on Heathrow expansion

In the fourth of a series of interviews looking forward to 2016, Flybe chairman Simon Laffin tells Financial Director that the government fails to work with industry to build the UK economy

What have been the biggest challenges for your business over the past year, and what role did finance play in addressing them?

Simon Laffin, chairman of UK budget airline Flybe: Uneven demand in the recovery, which – allied with very price-conscious consumers – means that we have needed to be especially careful in responding to consumer demand. Finance is even more vital than ever in showing us where and how we are making money. 

What are the key political and economic risks/opportunities you face in the year ahead?

There is a real risk that the government attempts to reduce the deficit too fast by major cuts in expenditure. This, allied with very low inflation, may well slow growth. It will also exacerbate the uneven nature of the recovery, with London continuing to behave like a different economy to the regions. The government doesn’t seem to work with industry to build the UK economy, instead focusing on the politics of the deficit and not making long-term infrastructure decisions, such as on a Heathrow expansion.

Which capex projects will you be focusing on in 2016, and how will these be financed?

Like everyone, we will invest in enhancing our IT capabilities, and we may take ownership of some aircraft in order to reduce the cost of operating them. IT will be largely funded out of our existing cash resources.

What business-friendly policies do you want the next government to undertake to improve the environment for UK corporates?

Connectivity is the key infrastructure requirement now. This includes fast broadband for consumers as well as businesses. The government talks a good game on this, but hasn’t yet delivered. The second connectivity is enabling people and goods to move around the UK easily.

The government has made a great play about connecting the UK to the world by air links, but actually handicaps regional air connectivity by levying domestic airline passenger duty at five times the per-mile rate of long haul. It then forces domestic air carriers to pay compensation for technical delays that can be four or five times the original ticket price. All this increases the cost, and reduces the availability, of domestic connectivity, which is a big issue for both the regions and the Northern Powerhouse.

Simon Laffin’s views are his own and not those of the company

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