UK Business Secretary Andrea Leadsom confirmed that a rescue deal has been agreed for Europe’s largest regional airline Flybe.

The deal follows after discussions between the management and shareholders.

It includes a potential £100m loan, a possible £106m air passenger duty (APD) bill short-term deferral and review taxes on domestic flights, reported The Guardian.

Leadsom said: “I am delighted that we have managed to reach an agreement with Flybe shareholders to keep the company in operation, ensuring that regions across the country can continue to be connected.

“My department and others across government have worked tirelessly in an incredibly short timeframe. This will be welcome news for Flybe, their customers and dedicated employees, as well as those in the supply chain. We will continue to work with Flybe and regional operators to find a sustainable long-term future.”

Flybe operates 68 aircraft and employs more than 2,000 staff.

In February last year, the Connect Airways consortium, which includes Virgin Atlantic, Stobart Aviation and hedge fund Cyrus Capital, acquired the airline.

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The troubled airline has now confirmed to continue operation and preserve flights to airports such as Southampton, Belfast and Birmingham.

Exchequer chancellor Sajid Javid said: “I welcome Flybe’s confirmation that they will continue to operate as normal, safeguarding jobs in UK and ensuring flights continue to serve communities across the whole of the UK.

“The reviews we are announcing today will help level up our economy. They will ensure that regional connections not only continue but flourish in the years to come so that every nation and region can fulfil its potential.”

As a result of this development, British Airways’ parent IAG has filed a formal complaint over the rescue of Flybe.