Stobart Group, one of the owners of the Connect Airways consortium which acquired the assets of flybe. (2002) (Exeter) last year, has committed to providing the UK regional airline with further short-term funding of up to GBP9 million (USD11.7 million), according to a statement to its investors. The shareholder life support money for the ailing carrier comes as Ryanair (FR, Dublin International) Chief Executive Officer (CEO) Michael O'Leary threatens to take the UK government to court over its Air Passenger Duty (APD) tax relief assistance plan.

In its investor statement, Stobart confirms that, to date, the consortium has provided GBP110 million (USD142.7 million) of funds to Connect Airways, with Stobart itself investing GBP45 million (USD58.4 million) through a combination of cash and the sale of Stobart Air (Dublin International) and its aircraft leasing business, Propius Leasing.

The group's statement claims that the consortium "has worked tirelessly alongside flybe. and the UK Government to look for solutions to ensure the financial viability of the airline so that consumers can continue to have confidence in flying with flybe."

The outcome of this 'tireless work' has been the government review of the application of UK domestic APD, as well as a review of UK regional connectivity, namely the support by the government of regional routes connecting key parts of the UK economy and the GBP9 million (USD11.7 million) capital injection by Stobart.

It also adds in its statement that the consortium's delay in receiving control, along with other legacy issues, impacted on the delivery of its turnaround plan for flybe. It announced its intention to buy the airline in January 2019, yet only received European Commission clearance on July 5, 2019. "This resulted in a situation in which a further injection of funds is required to ensure continued flying," it concluded.

While flybe. and its owners continue to construct a recovery plan, one of its competitors, Ryanair, is demanding an explanation from the UK authorities on the planned 'tax holiday' flying UK domestic routes and threatening taking legal action, according to a report in newspaper Irish News.

In a letter to UK Chancellor Sajid Javid, the Irish airline's CEO said in terms of the nature of the APD deal: "Should you 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."

IAG International Airlines Group, which owns British Airways (BA, London Heathrow), has already written to the European Commission claiming the arrangements breach state aid rules.