British Airways parent IAG has reportedly filed a complaint with the EU over the government’s rescue deal with Flybe.
The struggling carrier’s outstanding £106 million Air Passenger Duty bill is believed to have been deferred until the spring which will allow Flybe to get through a winter cash-flow crisis.
No additional details have been released by the government which is understood to still be negotiating a loan with the airline, according to Sky News.
Earlier IAG’s chief executive Willie Walsh blasted the deal as a “blatant misuse” of public funds.
EU rules restrict so-called “state aid”, such as cash grants or indirect aid which includes preferential borrowing rates or tax credits.
Under EU rules, member-state governments are allowed to provide state aid only with approval from the European Commission.
Environmental groups have also criticised the move arguing any cut to APD should not be sanctioned in the face of the climate crisis.
Flybe’s shareholders Connect Airways, which includes Virgin Atlantic, Southend airport owner Stobart Group and Cyrus Capital, are understood to have pledged to invest between £20 million and £30 million to cover losses.
Flybe employs 2,400 staff.
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