The owner of British Airways has complained to the European Commission over the UK Government’s decision to rescue Flybe from collapse, according to the PA news agency.
International Airlines Group claims the move breaches state aid rules and gives the struggling airline, which operates from a number of Scottish airports, an unfair advantage.
It comes hours after IAG chief Willie Walsh publicly criticised the move, describing it as a “blatant misuse of public cash”.
The Treasury announced on Tuesday evening that the loss-making regional carrier would continue operating after agreeing to review air passenger duty (APD).
Flybe shareholders agreed to inject extra capital into the airline business as a result, securing the short-term future of 2400 jobs.
Downing Street insisted there has been “no state aid to Flybe” and any support that is given to the firm would be on “strictly commercial terms”.