International Airlines Group (IAG) the owner of British Airways (BA) has filed a complaint with the EU over the “blatant misuse of public funds” to bail out Flybe.
IAG said the government bailout breaches state aid rules and has given the struggling airline an unfair advantage.
Willie Walsh IAG’s chief executive said in a letter to Grant Shapps the transport secretary, “Prior to the acquisition of Flybe by the consortium which includes Virgin/Delta, Flybe argued for tax payers to fund its operations by subsidising regional routes.
“Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline. This is a blatant misuse of public funds.
“Flybe’s precarious situation makes a mockery of the promises the airline, its shareholders and Heathrow have made about the expansion of regional flights if a third runway is built.”
Under the terms with the Treasury, a deferral payment amounting to more than £100m of Air Passenger Duty (APD) has been agreed in return the major shareholders must put in millions of funds.
Ryanair said, “We have already called for more robust and frequent stress tests on financially weak airlines and tour operators so the taxpayer does not have to bail them out.”