Airline Blue Islands is taking legal action concerning rival airline Waves.
The airline claims Waves, which started operating as an inter-island air taxi service last month, does not have a Guernsey Air Transport Licence and is operating illegally.
They're now calling for a judicial review, claiming the island's Transport Licensing Authority (TLA) is ignoring the law.
In a statement, Blue Islands say they have repeatedly called on the Authority to ensure Waves apply for the necessary route licences to operate passenger services between Guernsey and Jersey.
They say they are calling the review "to compel the Authority to act to uphold the law it is meant to enforce and protect the travelling public from an operator acting outside of the rules."
Waves say earlier this year they applied for an Aircraft Operators Certificate and on September 22nd this year, they were granted it.
They say this enables them to operate an inter-island air taxi service.
In a statement the Transport Licensing Authority said, "The matter is now before the Court and they cannot comment at this time".