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BA complains to EU about Flybe bailout

British Airways’s parent company IAG  has laid a complaint against the UK government to the European Commission after a reported £100million rescue deal was announced for its troubled low-cost rival Flybe.

17 January 2020
By Oliver Rowland

It may be the last major complaint based on allegedly illegal state aid made against the UK as an EU member before Brexit, which is due to happen at the end of January.

The British prime minister’s office has however denied that the deal reached to save Flybe was illegal state aid.

Flybe is claimed to have been granted tax relief of £100million, so “Britain’s regions would remain connected.”

The company flies to 15 French airports and has so far refused to say if its French operations will continue

“We can confirm we have received the submission from IAG,” a European Commission spokeswoman told Connexion.

Asked about how Brexit would affect the handling of the case, she said: “As long as the UK is an EU Member State, it has all the rights and obligations of membership.

“In particular, EU competition law, including EU state aid rules, continue to apply in full to the UK and in the UK until it is no longer a member of the EU.

“According to the Withdrawal Agreement, during the transition period, the entire body of EU law is due to continue to apply to, and in, the UK as if it were a member state. This includes all EU rules relating to state aid.”

A spokesman for 10 Downing Street told the BBC the government is “fully compliant” with state aid rules.

The prime minister's spokesman was quoted as saying:  “there has been no state aid to Flybe,” adding that “any future funding will be made on strictly commercial terms.”

The news of the Flybe rescue came in a Tweet from the UK’s Business Minister Andrea Leadsome.

She said that she was “delighted” the airline would continue to function and that Britain’s regions would remain connected.  No details of the deal were given, but leaks to the UK media said Flybe will not have to pay a £100million tax bill when it is due.

Flybe’s press office issued the following statement: “We are delighted with the support received from the government and the positive outcome for our people, our customers and the UK. Flybe remains committed to providing exceptional air connectivity for the UK regions with the full support of its shareholders.”

The news of the rescue deal provoked outrage from British Airways, which competes with Flybe on a number of routes, including French ones.

Flybe flies to Avignon, Bergerac, Bordeaux, Brest, Caen, Chambéry, La Rochelle, Limoges, Lyon, Nantes, Paris, Perpignan, Rennes, Rodez and Toulon in France.

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