Flybe, Europe’s largest regional airline, is scrambling to stave off a collapse that would put 2,000 jobs at risk.
The airline operates more UK domestic flights than any other, and is in talks over potential emergency financing after suffering rising losses, Sky News reported.
It said Flybe had been holding talks with the Department for Business, Energy and Industrial Strategy and the Department for Transport on whether the government could provide or facilitate any emergency financing to the company.
A Flybe spokeswoman said: “Flybe continues to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned.
“We don’t comment on rumour or speculation.”
Spokesmen for the two government departments issued the same statement, saying: “We do not comment on speculation or the financial affairs of private companies.”
Flybe flies 8.5 million passengers each year to 170 European destinations.
The Exeter-based firm operates a number of domestic routes in Britain between cities that are connected by direct trains, such as Manchester-Glasgow, Birmingham-Edinburgh, Exeter-Manchester and Exeter-London City.
Last February, the airline was bought by a consortium led by Virgin Atlantic following poor financial results.
Connect Airways, which consists of Virgin Atlantic, Stobart Air and Cyrus Capital, paid £2.2m for Flybe’s assets and operations.
Flybe completed the sale of its assets to the group in the deal worth only 1p per share.
Brian Strutton, the general secretary of the pilots’ union Balpa, said: “I am appalled that once again the future of a major UK airline and hundreds of jobs is being discussed in secret with no input from employees or their representatives.
“This is an appalling state of affairs and we demand that the owners of Flybe – Virgin, Stobart and Cyrus – and the government departments involved stop hiding and talk to us about Flybe.
“We have a right to be consulted and the staff have a right to know what is going on.”