A former Lehman Brothers trader has been handed more than £1m of taxpayer cash to set up a new airline, despite established carriers being repeatedly rebuffed in their bids for a bailout.
Navdip Singh Judge has secured a seven-figure sum from a £250m Government fund aimed at Covid-hit start-ups for his firm Flypop, which will specialise in low-cost flights to India. The carrier has no planes and is yet to secure an operating licence.
The deal threatens to further inflame tensions between the Government and the cash-strapped aviation industry. Airlines have been begging for a state rescue package since coronavirus grounded flights around the world in spring, but ministers have insisted they must make do with untargeted support such as the furlough scheme.
Flypop will get money from the Government’s Future Fund, which was launched in May to support “high-growth British businesses able to secure investment to help them through the coronavirus outbreak”.
The firm said it is in talks with aircraft manufacturers to buy planes and will apply for a licence to operate after finishing its current funding round.
Despite the aviation industry being hit hard by the pandemic, Chancellor Rishi Sunak has said airlines and airports will only receive bespoke support once all other options have been exhausted.
Ministers refused to hand Virgin Atlantic a £500m bailout over the summer. Earlier in the year they balked at injecting around £100m into regional airline Flybe, which subsequently collapsed into administration.
Last night Downing Street was facing questions from bosses over the decision to hand a new airline taxpayer support instead of backing airlines and airports as they prepared for the second lockdown.
One senior industry figure said: "It's great that the Government recognises the importance of aviation in connecting Britain to the world and we look forward to receiving details of its support package for existing airlines devastated by its latest lockdown."
Mr Judge - who has referred to himself as "the Sikh Michael O’Leary" after the Ryanair boss - launched the airline in 2016 after a career as a bond trader and officer in the British Army.
Flypop cited remarks by Boris Johnson during his General Election campaign promoting closer ties between the UK and India.
Mr Judge said: "The funding from the UK Government’s Future Fund will play a key role in putting Flypop in a position to start flights, initially between the UK and India."