Ryanair chief Michael O’Leary has written to chancellor Sajid Javid threatening legal action over the government’s decision to rescue rival airline, Flybe.
O’Leary’s letter argues that the state help given to Flybe is in breach of competition rules and that other airlines should have access to the same privileges.
O’Leary indicated that if this is not made the case, Ryanair will press on with legal action against the UK government.
The letter labelled the rescue deal a “badly thought-out bailout of a chronically loss-making airline”.
It reads: "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.”
Ryanair's letter requested that the government clarify the extent of support that is being provided to Flybe.
The troubled airline is not thought to have been provided with state funding under the deal, but has been given deferral on over £100 million worth of outstanding Air Passenger Duty payments to HMRC.
The letter adds: "Should you [the government] fail to confirm these facts within the next seven-day period, please be advised that Ryanair intends to launch proceedings against your government for breach of UK and EU competition law and breach of state aid rules."
Flybe is owned by a consortium which includes Virgin Atlantic, Stobart Group and Cyrus Capital. They will invest £30 million into Flybe to supplement the tax deferral.
IAG group, which owns British Airways, has already filed a complaint to the EU over the bailout being in breach of state aid rules. Its chief executive, Willie Walsh, has also been a vocal critic of the government’s decision to step in, arguing that Flybe's owners have sufficient collective resources to save the operator themselves.
IAG has also written to the government citing a "lack of transparency" and submitted its own Freedom of Information request over the terms of the rescue deal.
The government has insisted that the rescue deal is fully in line with EU state aid rules.
