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."