The owner of British Airways and Aer Lingus has filed a complaint over the Government's decision to rescue Flybe from collapse.
International Airlines Group (IAG) has claimed to the European Commission that the move breaches state aid rules and gives the struggling airline an unfair advantage.
However, a Government spokesman said no State Aid has been given to Flybe.
It comes hours after IAG chief Willie Walsh publicly criticised the move, describing it as a “blatant misuse of public cash”.
The Treasury announced on Tuesday evening that the loss-making regional carrier would continue operating after agreeing to review air passenger duty (APD).
Flybe shareholders agreed to inject extra capital into the airline business as a result, securing the short-term future of 2,400 jobs.
Campaigners warned Boris Johnson that any APD review that leads to cheaper air travel would be a "complete scandal" and "rip up" the Prime Minister's pledge to show leadership on the climate crisis.
Flybe's shareholders agreed to a cash injection - understood to be in the region on tens of millions of pounds - to keep Europe's largest regional carrier in business "alongside Government initiatives".
The airline would not comment when asked if the Treasury had separately agreed to the deferral of a portion of the airline's outstanding tax bill over a period of months.
The emergency agreement seeks to prevent Flybe becoming the second UK carrier to fail in four months after Thomas Cook went bust in September.
The Treasury said the APD review ahead of the March Budget would consider the UK's climate commitments to meet net zero greenhouse gas emissions by 2050.
Flybe chief executive Mark Anderson welcomed the deal as a "positive outcome for the UK" which "will allow us to focus on delivering for our customers and planning for the future".
Greenpeace UK policy director Dr Doug Parr has said any cuts to APD was a "poorly thought-out policy that should be immediately grounded".
