Complaint over Flybe rescue deal

Airline chief slams ‘misuse of public cash’

FLYBE: British Airways owner International Airlines Group (IAG) has filed a complaint with the European Union over the Government’s decision to rescue Flybe.

IAG has claimed to the European Commission that the rescue deal for Flybe breaches state aid rules and gives the airline an unfair advantage.

BRITISH AIRWAYS owner International Airlines Group (IAG) has filed a complaint with the European Union over the Government’s decision to rescue Flybe.

It is understood that IAG has claimed to the European Commission that the rescue deal for Flybe breaches state aid rules and gives the struggling airline an unfair advantage.

Downing Street has since insisted there has been “no state aid to Flybe” and any support that is given to the firm would be on “strictly commercial terms”.

It comes hours after IAG chief Willie Walsh publicly criticised the move, describing it as a “blatant misuse of public cash”.

The Treasury announced on Tuesday that the loss-making regional carrier would continue operating after agreeing to review air passenger duty (APD).

Flybe shareholders agreed to inject extra capital into the airline business as a result, securing

the short-term future of 2,400 jobs. Flybe is owned by Connect Airways, a consortium involving Virgin, Stobart Aviation and Cyrus Capitals, which purchased the airline at the start of last year. It operates from Leeds Bradford Airport.

It is understood that IAG’s complaint claims that the Government is propping up “feeder flights” that benefit Virgin and Delta.

The Prime Minister’s official spokesman said: “The actions we have taken will support and enhance regional connectivity across the UK so local communities have the domestic transport connections they rely on.

“Any changes implemented as a result of our reviews of air passenger duty and regional connectivity will apply to all airlines in the competitive aviation market.”

Departing IAG boss Willie Walsh blasted the deal, saying it “makes a mockery” of previous promises made by Flybe about the expansion of regional flights. Other airline rivals, such as easyJet, have also criticised the state support, while also praising the decision to review APD.

Helen Dickinson, chief executive of the British Retail Consortium, said the Government has been “quick to jump to the support of Flybe” but tens of thousands of jobs are being lost across retail without any action “on the multitude of costs bearing down on the industry”.