The Prime Minister has said the Government is 鈥渨orking very hard to do what we can鈥 to save airline Flybe.
But Boris Johnson warned there are 鈥渓imits鈥 to what a government is allowed to do to help individual companies.
Chancellor Sajid Javid will hold talks with the business and transport secretaries to discuss if the loss-making regional carrier can defer paying this year鈥檚 estimated air passenger duty (APD) bill of 拢106 million for three years or whether the tax should be cut for all domestic flights, according to multiple reports.
Airlines claim APD restricts connectivity and passenger growth.
Passengers on domestic flights pay 拢26 in APD for a return trip, with higher rates for longer flights and premium cabins.
The tax is expected to be worth 拢3.7bn to the Treasury in 2019/20.
The official (ONS) estimate for APD revenues in Wales for 2018-19 is 拢12m, there is no official estimate of APD revenues from just domestic flights.
The Welsh Government and Cardiff Airport has been calling for the abolition of APD for a number of years.
Calls to devolve powers over flight taxes to Wales were rejected by the 海角视频 government last September.
This had followed a report by MPs in June that argued Welsh ministers should control APD by 2021, as is the case in Northern Ireland and Scotland.
The Welsh Government said that if APD was devolved it would abolish the rate on long haul flights as a means of attracting more long haul scheduled routes out of Cardiff Airport, which it owns.
However, the move was rejected as 海角视频 ministers feared the impact the move would have on Bristol Airport.
A Welsh Government spokesperson said: 鈥淲e have long campaigned for devolution of Air Passenger Duty (APD). We continue to call for the devolution of APD so that we can make our own decisions in terms of how best to support Cardiff Airport.
鈥淒ecisions about Wales should be made in Wales. The 海角视频 Government鈥檚 failure to devolve APD continues to place unjustifiable constraints on our ability to promote Wales to overseas markets and support growth in the aviation sector and wider economy.鈥
Deb Bowen Rees, CEO of Cardiff Airport, agreed and described APD as a punitive tax that should be abolished at the earliest opportunity to support and stimulate economic growth. This is something Ms Bowen Rees said the Airport had been strongly arguing for more than a decade.
In evidence to the Welsh Affairs Committee last year, which recommnded APD should be devolved, Cardiff Airport said if APD was devolved and reduced it could see passenger numbers at the airport increase by 100,000 to 4000,000 a year, over around 600,000 extra passengers by 2025. However, no calculations if the tax was also abolished at the rival airport in Bristol.
鈥淩egional air connectivity as provided by Flybe, is a critical enabler for the economy and a pivotal part of the 海角视频鈥檚 strategic infrastructure,鈥 Ms Bowen Rees said.
鈥淎bolishing domestic APD would help to protect business viability and maintain the vital economics benefits of trade and tourism at a time when the 海角视频 needs to flourish.
鈥淭he connectivity that Flybe provides the 海角视频 is critical to the economy and goes beyond the capability of road and rail - ensuring its long term viability must be a priority. We urge the 海角视频 Government to take this opportunity to abolish domestic APD to support regional economies and growth across the country.鈥
If Flybe collapses, it would be the second 海角视频 airline to fail in four months, after Thomas Cook went bust in September.
Asked if he intends to save Flybe, Mr Johnson told the BBC: 鈥淚t鈥檚 not for Government to step in and save companies that simply run into trouble.
鈥淏ut be in no doubt that we see the importance of Flybe in delivering connectivity across the whole United Kingdom.
鈥淚t鈥檚 very important, for instance, where I was yesterday in Northern Ireland, and we鈥檙e working very hard.
鈥淚 can鈥檛 go into commercially confidential discussions. We鈥檙e working very hard to do what we can, but obviously people will understand that there are limits, commercially, to what a government can do to rescue any particular firm.
鈥淏ut what we will do is ensure that we have the regional connectivity that this country needs.鈥
Shadow chancellor John McDonnell claimed 鈥渂ailing out a company through a tax cut across the industry is not the way forward鈥.
He went on: 鈥淲orking with the company and unions, the Government should look at targeted assistance to support routes judged on economic, environmental and social grounds.鈥
Flybe was bought by a consortium consisting of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019 following poor financial results.
The consortium, known as Connect Airways, paid just 拢2.2 million for Flybe鈥檚 assets but pledged to inject cash into the airline to turn it around.
The holding of rescue talks with the Government over the weekend indicates the financing requirements have become greater than expected.
The airline is Europe鈥檚 largest regional carrier, flying around nine million passengers a year to 170 destinations across the continent.
The airline began as Jersey European Airways in 1979, operating regional flights from Jersey.
Its route network grew and it was rebranded British European in 2000, before becoming Flybe in 2002.
Tim Alderslade, chief executive of trade body Airlines 海角视频, which represents 海角视频 carriers, said: 鈥淥ne of the advantages of leaving the EU is the possibility of cutting or removing APD on domestic travel.
鈥淚t鈥檚 an anomaly that particularly hurts regional aviation as it鈥檚 levied on both legs of a return journey.
鈥淚rrespective of the Flybe situation we hope the Government will take a closer look at this - and all other elements of our ruinously high and uncompetitive APD - as we need to support our strategically vital regional air connectivity.
鈥淟evying 拢26 in tax when - in the case of Flybe - the average fare is 拢52 is not sustainable when so many other costs on airlines are increasing.
鈥淎PD is not and never has been an environmental tax. It has no bearing on the ability of the aviation industry to decarbonise and achieve net zero emissions by 2050.
鈥淭his will be achieved via a range of other measures, including airspace modernisation, the development of sustainable aviation fuels, new, cleaner planes, and the UN carbon offsetting scheme Corsia, which captures growth in all emissions from international aviation and will mitigate around 2.5bn tonnes of CO2 between 2021 and 2035.鈥
Speaking in the Commons, Green Caroline Lucas (Brighton Pavilion) said: 鈥淥ver the coming months, it will become ever more apparent that tackling the climate emergency means rapid changes to high carbon sectors and that aviation must decrease, not increase.
鈥淪o instead of bailing out polluting companies every time there鈥檚 a crisis, and in this instance doing so in a way that鈥檚 going to increase emissions, does he agree that instead the Government should be developing just transition plans for high-carbon industries, retraining workers in new sustainable jobs, involving unions and local communities and in this case enhancing rail connectivity.鈥
