IAG lodges EU complaint about Flybe rescue

British Airways’ parent company has started proceedings with the EU after the government helped the regional airline to save itself from the brink of collapse.

Flybe’s consortium owners – Virgin Atlantic, Stobart Group and Cyrus Capital Partners – are reportedly injecting cash into the business in return for an £100 million Air Passenger Duty tax break.

IAG’s chief executive Willie Walsh, who is standing down from his role in March before retiring in June, said the decision was a “blatant misuse of public funds”.

“Prior to the acquisition of Flybe by the consortium, which includes Virgin/Delta, Flybe argued for taxpayers 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.”

If Flybe had collapsed, more than 2,000 people would have been left jobless.

A Ryanair spokesperson added: "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."