British airline Flybe is fighting for survival and the UK government is being called upon to help prevent a second airline failure in less than six months, according to Sky News.
The regional airline has nearly 70 aircraft links smaller cities with the rest of the UK and Europe, and was meant to undergo massive changes in 2020 after a takeover led by Sir Richard Branson.
Flybe wouldn't confirm reports of it financial troubles, saying it did not comment on rumour or speculation, while the UK government's Department for Transport said it did not comment on the financial affairs of private companies.
Sky News reports that Flybe bosses held rescue talks with the government on Sunday (local time) as its fragile finances were hit by a higher fuel price during the winter months, when demand is lower.
Accountancy firm EY is on standby to handle the possible administration of Flybe, according to the Sky News report. EY did not immediately respond to Reuters requests for comment.
Should Flybe collapse, it would be the second high-profile failure in Britain's travel industry in less than six months after Thomas Cook went into liquidation last September, stranding thousands of passengers.
Flybe has 68 aircraft in its fleet and about 2000 staff and was already reportedly struggling when it was bought by Connect Airways, a consortium created by Virgin Atlantic.
The new owners' turnaround plan involved providing a NZ$40 million bridging loan facility and up to NZ$156 million of funding, but reports said more investment was needed, pushing Flybe to the brink.
Flybe's fleet of small aircraft includes the Bombardier Dash-8 Q400, which seats 77 passengers and connects regional airports such as Exeter, where it is based, Birmingham and Aberdeen to other British and European cities, as well as operating flights from Europe's busiest airport Heathrow.
While demand for flights from airports such as Heathrow was healthy, Flybe struggled to compete against road and rail options on some regional flights, said analysts.