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U.K. carrier Flybe has reportedly said it can only survive until the end of this month without extra financing thanks to a slump in bookings due to the coronavirus.
The U.K. government had been in talks with Flybe owner Connect Airways, which includes Virgin Atlantic, Stobart Group and Cyrus Capital, about a potential £100 million loan aimed at stabilizing the business after the airline was reportedly on the brink of collapse.
However, the Financial Times has reported that the request for finance has been rejected, though sources would not comment on the rumor.
A source did say that, like other airlines, Flybe has been hit by slowing demand in the wake of the Covid-19 outbreak, adding: "Coronavirus has made a difficult situation far more difficult."
According to the FT report, a source said Flybe believes it only has the resources to last "until the end of this month."
Flybe and the U.K. Department for Transport have declined to comment on the article.
In addition to the rescue loan, the government had agreed to give Flybe more time to settle a tax bill of less than £10 million. It also said it would review domestic Air Passenger Duty in an effort to ease the burden on the struggling regional carrier.
The rescue was criticized by the wider aviation industry, with Ryanair Group CEO Michael O'Leary even threatening legal action because he believes the deal violates state aid rules.
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