(Adds background)
LONDON, Jan 15 (Reuters) - Willie Walsh, head of the British
Airways parent company, has attacked a government-backed rescue
of regional UK airline Flybe, calling it a blatant misuse of
public funds.
Flybe was rescued on Tuesday after its shareholders agreed
to invest more money while the government provided support,
reported to involve the deferral of a tax bill.
Walsh, chief executive of British Airways-owner IAG
and one of the biggest names in the industry, criticised the
government support for a privately-held company, saying the
taxpayer was picking up the tab for mismanagement of the
airline.
"This is a blatant misuse of public funds," he said in an
emailed statement.
Walsh and other critics of the Flybe bail-out pointed to the
fact that the carrier's ultimate owners surely had deep enough
pockets to ensure the airline's survival without government
help.
British Airways competes against Flybe on some routes and
Flybe is owned by a group which includes long term BA rival
Virgin Atlantic, plus Stobart Group and investment
adviser Cyrus Capital.
Virgin Atlantic is 51% owned by Richard Branson's Virgin
Group with the balance held by another BA rival, Delta,
the second biggest U.S. airline by passenger numbers with a
market capitalisation of $40 billion.
Under pressure to deliver on an election promise to help
improve transport links outside London, the government agreed to
help Flybe, in contrast to a similar test last September when it
took no action to help save the much larger travel company
Thomas Cook.
Flybe connects smaller UK cities such as Southampton and
Newcastle and its network of routes includes more than half of
UK domestic flights outside London.
Walsh has also written a letter to Transport Minister Grant
Shapps, said the BBC, outlining his concerns about the Flybe
deal.
(Reporting by Sarah Young; editing by Kate Holton)
