The Government is under fire for bailing out Flybe when the ailing airline’s owners include billionaire Sir Richard Branson.
Ministers and the firm agreed a deal which is believed to include giving more time to pay a £106million tax bill.
The Treasury will also consider a cut in air passenger duty on domestic flights, a boost given it has so many domestic routes.
Yet the deal comes months after the refusal to rescue Thomas Cook.
International Airlines Group, which owns British Airways, called it “a blatant misuse of public funds” and filed a complaint with the European Union.
EasyJet chief executive Johan Lundgren said: “Taxpayers should not be used to bail out individual companies, especially when they are backed by well-funded businesses.”
Ryanair 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”.
Flybe was bought for £2.2million last year by a consortium 40 per cent owned by US hedge fund Cyrus Capital.
Another 30 per cent belongs to Virgin Travel Group, part of Virgin Atlantic which is owned by giant US airline Delta and Branson.
The remainder is held by Stobart Group, which has a stock market value of £400million.
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