Newport News/Williamsburg International Airport risks losing funding from the Virginian State Government after it was revealed that the airport had paid off debts for failed start-up airline PEOPLExpress (V2, Newport News), reports The Daily Press.

The Peninsula Airport Commission, which administers the airport, guaranteed a USD3.55 million line of credit for PeoplExpress from TowneBank and says that, after seeking legal advice, it believed the move was allowed under its mandate.

"They may think so, but nobody else does," Aubrey Layne, Virginia Secretary of Transportation, is reported as saying.

The discretionary fund had been earmarked for infrastructure and capital improvements. Airport Executive Director Ken Spirito says that using the funds for other expenses was permissible as it will be deducted from future budget requests. Spirito is confident an audit will clear the Commission of any wrongdoing.

The Daily Press further reports that the Commission spent USD425,000 in advertising for PEOPLExpress which suspended operations in September 2014 less than four months after commencing operations from the airport.