IAG, the owner of British Airways, has filed a complaint with the European Commission over the UK government’s decision to bail out rival airline Flybe.
Earlier this week, the government announced a rescue deal that included a £100 million loan and a deferral of Flybe’s tax bill. In its complaint, IAG claims that the deal is a “misuse of public funds” that contravenes state aid rules.
The company argues that the deal subsidises a direct competitor of British Airways and Aer Lingus, as well as benefiting another rival, Virgin Atlantic, which is one of Flybe’s biggest shareholders. Virgin Atlantic is 49% owned by US airline Delta.
“As with all member states, we stand ready to discuss with the UK the compatibility and proposed public measures with the EU state aid rules,” said a European commission spokesperson.
“Any state aid intervention needs to be designed so that competition is not distorted and a level playing field is maintained.”
The UK government, however, maintains that it has not given Flybe state aid.
Header image: Joel Barwick