British Airways owner goes to war over deal to rescue Flybe

The deal to rescue Flybe from collapse looks lit it could be put at risk after reports emerged that other airlines have complained about its terms.

British Airways and Aer Lingus owner International Airlines Group has filed a complaint with the European Commission, claiming the Government’s decision to rescue Flybe from collapse breaches state aid rules and gives the struggling airline an unfair advantage, PA understands.

Last night the Government agreed on a deal to throw a lifeline to the troubled airline to help keep it operating.

The Government is thought to have deferred Flybe's outstanding £106million air passenger duty bill until the spring to allow it to get through a winter cash-flow crisis.

The company's wealthy owners are also understood to have promised investment of more than £20million.

Business Secretary Andrea Leadsom said the deal would keep the company operating.

The government is understood to have been briefed on the crisis at Flybe in the last few days, with more than 2000 jobs at risk if the company collapses (Getty Images)

However, Willie Walsh, head of the British Airways' parent company IAG, has attacked the Government-backed rescue of regional UK airline Flybe, calling it a blatant misuse of public funds.

Walsh and other critics of the Flybe bail-out pointed to the fact that the carrier's ultimate owners surely had deep enough pockets to ensure the airline's survival without government help.

Walsh, chief executive of British Airways-owner IAG, criticised the government support for a privately-held company, saying the taxpayer was picking up the tab for mismanagement of the airline.

"This is a blatant misuse of public funds," he said in an emailed statement.