A NIGERIAN businessman behind plans to launch a North-East airline has been questioned by the fraud squad.

Victor Bassey was arrested yesterday morning after concerns were raised by former employees of his company, Excelsis Airways.

It is understood police have taken statements from several former senior Excelsis officials.

Company documents have also been copied by officers.

Police in Darlington were first contacted by a member of Excelsis staff at the beginning of last month.

It is understood another complaint has been made to Thames Valley Police.

The airline collapsed earlier this month after all 12 employees resigned when Mr Bassey failed to pay their wages.

A spokeswoman for Cleveland Police said: “Detectives from Cleveland Police fraud investigation team arrested a 49-year-old man on suspicion of fraud.

“The man has been taken to Middlesbrough police office to be questioned.”

Police said last night Mr Bassey had been released on bail until January 25.

Plans by Excelsis to run daily flights between Durham Tees Valley Airport (DTVA) and London City Airport were revealed in May.

It was hoped the service would fill the gap left by bmi’s decision in February to axe its service to Heathrow.

In a further blow to efforts to restore air links between the Tees Valley and London, experts yesterday warned that attempts to reserve landing slots at Heathrow for flights from DTVA were unlikely to succeed.

Even if a Public Service Obligation (PSO) application to the Department for Transport (DfT) was successful and the slots were protected for flights from the regions, advisors said it could cost the North-East more than £20m.

Following the cancellation of the bmi service to Heathrow, regional development agency One North East asked RDC Aviation to examine if there was scope for an application for the route to be served under PSO regulations.

This would allow for slots to be “ring-fenced” and for state financial support to provide air links.

RDC Aviation’s report concluded it was unlikely an application would meet the DfT criteria and it would be costly to implement.

Even if was approved and was not challenged, the report said it could cost £21.5m to buy the slots and offer a business service from DTVA.

Ongoing support to keep the route open would be between £1m and £2m per year, with about £80,000 required every three years in tender and support fees.

Experts said the region would be expected to pay the full amount of any subsidy.

Community and business leaders said this meant the proposal was not a practical solution.

But John Lowther, of the Tees Valley Joint Strategy Unit, said the report underlined that a major threat to regional services to Heathrow was the pricing system operated at the London airport.

The structure means it costs as much for small regional service aircraft to land as it does for larger aircraft on international routes.

Mr Lowther said: “That, we believe, is an issue which we must again raise through our local MPs and the regional minister.”

Alan Welby, of One North East, said: “Following the withdrawal of the bmi service from DTVA, the Department for Transport identified a PSO designation as a possible avenue to be considered.

“This independent report concludes that this is unlikely to be a practical solution.”