Transport Secretary Grant Shapps has denied any illegality in the moves made by the government to help save Flybe from potential collapse.
The airline confirmed it had struck a deal with HM Revenue and Customs to temporarily defer tax payments of “less than £10 million”.
And meanwhile, the government also announced it would review the way Air Passenger Duty (APD), which is the tax on flying, operates for domestic flights.
The moves have sparked outrage among competitors, with bosses from Ryanair and British Airways complaining that they too should be given a “tax holiday”.
But Mr Shapps denied that Flybe was receiving preferential treatment, telling talkRADIO: “I’m not really sure why there has been quite so much fuss.”
The Cabinet minister said that Flybe did not approach the government for a rescue deal but claimed ministers recognised a “UK strategic interest in connecting communities together”.
On the matter of the APD review, he told Julia Hartley-Brewer: “Of course, it will apply to all operators, so it’s not specifically to do with Flybe, it will apply to British Airways or anyone else in just the same way.”
He also defended the arrangements made between Flybe and HMRC by saying the Time to Pay scheme is available “for all companies”, including when they are in difficulty.
Flybe has said the deal “will only last a matter of months before all taxes and duties are paid in full” but neither the government not the airline has confirmed whether APD was the tax that they have agreed to delay payment over.
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