Ryanair chief executive officer (CEO) Michael O'Leary has threatened legal action over the government rescue of regional carrier Flybe.
In a letter to the Chancellor of the Exchequer, Sajid Javid, Ryanair CEO Michael O'Leary threatened to take legal action over the state rescue of Flybe as it violates competition rules.
O'Leary argues that government measures being extended to Flybe should also be given to the airlines. If they are not, O'Leary said Ryanair will launch legal proceedings against the government.
Similarly, British Airways' owner IAG has already filed a complaint with the European Union (EU), arguing that the Flybe rescue breaches state aid regulations.
The UK government earlier this week approved a rescue plan for Flybe, which is thought to be centered around giving the airline extra time to pay around £100 million of outstanding Air Passenger Duty (APD).
While details of the rescue plan have not been made public, the government claims that it is in line with state aid rules.
In his letter, O'Leary called the rescue a "badly thought-out bailout of a chronically loss-making airline" and wanted any tax holiday given to Flybe to be extended to rival operators.
He said: "Unlike Flybe we all operate profitable business models (without the benefit of being owned by billionaires). We must be treated the same as Flybe if fair competition is to exist."
Among the owners of Flybe were Richard Branson's Virgin Atlantic, Stobart Group and Cyrus Capital, who have agreed to invest £30m into the airline. Stobart Group said it will provide £9 million of capital "with the funds drawn down only if required".
According to Her Majesty's Revenue and Customs (HMRC), the "tax holiday" being givent to Flybe is available to other businesses that run into trouble. It said: "Time to Pay agreements are common where taxes or duties are owed."
