Britain's largest regional airline teeters on the brink of collapse

One of the biggest airlines in Britain is staving off collapse, engaging in negotiations to secure additional funding to keep planes running.

Established in 1979, Flybe is Britain's largest regional air carrier, operating more domestic flights within the United Kingdom than any other airline.

Rising fuel costs, along with an estimated air passenger duty (APD) bill of £106 million (A$199.8 million), now threaten to crush Flybe's bottom line.

Sky News reports that Flybe has been holding secret talks with the Department for Business, Energy and Industrial Strategy to explore whether emergency financing would be an option for the business.

Despite the headlines, Flybe is maintaining a determined public image.

In a global statement issued to the press and to its passengers, Flybe said the company "continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned".

"We don't comment on rumour or speculation," the airliner noted.

WHY FLYBE MATTERS

Although Flybe is relatively unknown outside of Britain, the role it plays for rural customers has been described as invaluable.

Unlike other budget carriers such as easyJet or Ryanair, Flybe travels to small airports such as Newquay in Cornwall and provides a central lifeline for residents on the Isle of Man to Liverpool.

Flybe even operates a contract with the UK government to transfer NHS patients from the island when they require services only offered at larger hospitals on the mainland.

Flybe carries an average of eight million passengers every year and employs approximately 2,000 people, all of whom would lose their jobs if the airline were to collapse.

In March last year, Flybe was delisted from the London Stock Exchange after it was purchased by a group called Connect Airways consortium, who are backed by Virgin Atlantic and Stobart Aviation.

Flybe was earmarked to be re-branded as "Virgin Connect", but the organisations deep financial troubles seem to have sidelined that plan until funding for the business is secured.