Troubled airline Flybe has reportedly warned the government it could "collapse within days" following a drop off in bookings caused by coronavirus - and needs financial support.
The embattled carrier, which employs 2,000 people, reportedly renewed its plea to the government while in talks for a £100million rescue loan to help shore up its finances. However, discussions around the initial loan appear to have disintegrated, Sky News is reporting.
The loan was part of a package of measures announced by the government almost two months ago to help Flybe, but the airline's request for funding did not reportedly meet the right criteria, according to the FT.
It is also being reported by the FT that Flybe only has enough funding to keep it going until the end March.
It means the airline's survival could hinge on whether there is a cut to Air Passenger Duty (APD) - a tax on passenger flights from UK airports - in next week's Budget.
Cutting APD formed part of the rescue deal discussed by ministers after Flybe came close to collapse in January. However, last month it was reported the new chancellor could potentially throw out plans for an overhaul of APD.
Flybe has reportedly complained for some time that APD of up to £26 a flight disproportionately affects its finances, making its UK low-cost short trips less attractive than alternatives.
The FT has reported Flybe's executives told the government 88 of its 120 routes are not flown by any other airline and and are likely to be scrapped if it collapses.
But according to rival airlines, Whitehall officials are drawing up plans to ensure routes are kept if Flybe fails.
Government support for Flybe had already reportedly sparked legal threats from rivals including Ryanair and British Airways' parent company.
The news come just a year after the airline was rescued by a consortium led by Virgin Atlantic following poor financial results.
Connect Airways, which consists of Virgin Atlantic, Stobart Air and Cyrus Capital, paid £2.2million for Flybe's assets and operations.
Flybe has been contacted for comment.
