Newquay-to-Gatwick Flybe route threat lifted
Cornwall's air link to London, which was due to be axed in March, will continue until next autumn.
Flybe has announced it will keep the Newquay-London route going until October 2014.
That could give Cornwall Council time to arrange a public subsidy that would guarantee the route longer-term.
Flybe has secured new slots, allowing its 78-seat planes to continue to fly from Newquay twice daily - morning and evening.
No other firm came forward to run the route and the South West's only link to a major London airport, the Newquay-Gatwick route, looked set to be cancelled.
The "commercially sensitive" deal, which is being kept under wraps by Flybe, buys time for the council to hopefully complete a process to unlock public funding to support the troubled route from October onwards.
In October, the Department for Transport confirmed to Cornwall Council that the route was technically eligible for subsidy.
If the complex arrangements can be put in place, the government will support an operator - not necessarily Flybe - to run the route for a four-year period.
The BBC understands the subsidy could amount to several million pounds each year.
But Niall Duffy from Flybe said without the subsidy, the route was not viable.
"This is a route that, without public subsidy, is not sustainable on a year-round basis," he said.
"If you look at Scotland, if you look at some parts of Wales, there are public subsidised routes that keep passengers on the move and I think London and the DfT need to seriously look at their commitment to rebalancing the economy."
The news has been widely welcome in the Duchy by business leaders, MPs and the local authority.
Cornwall Council said it would add weight to its attempts to make the connection a "Public Service Obligation" route.
"The air link between Newquay and London is vital for the economy of Cornwall," Councillor Adam Paynter said.
Jobs and Investment
He said he believed the airport was financially viable, adding that the council would be working with Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) and the county's MPs to secure the long-term future of a link to London.
Stephen Gilbert, the Lib Dem MP for St Austell and Newquay, said he welcomed the news on behalf of the Duchy's six MPs.
"This is great news but it doesn't mean that we are out of the woods yet, however this extension will be a great relief to businesses," he said.
"In all of this we have to remember that the airport is about jobs and investment across Cornwall and we need to secure it for the long term."
Chris Pomfret, chair of the LEP, said: "The provision of a regular year-round service to a London hub airport with a schedule that works for businesses is vital to the economy."
However, he said if Cornwall and the Isles of Scilly were to improve economically, a year-round service had to be secured.