Flybe, Europe’s largest regional airline, is at risk of collapse, according to a report.

The airline operates more UK domestic flights than any other- including from Manchester Airport - and is reportedly in talks over potential emergency financing after suffering rising losses, Sky News reported.

The news site said it was locked in crisis talks with the Department for Business, Energy and Industrial Strategy and the Department for Transport (DfT).

Around 2,000 jobs are said to be at risk.

The Walker family trust, which took on the assets of businessman and former Blackburn Rovers football club owner Jack Walker, was the majority shareholder of Flybe through Rosedale Aviation Holdings before offloading its 48.1 per cent stake for £25.2m in 2013.

It cuts long-held ties with the Walker family, originally formed in 1983 when Mr Walker's steel business took over the then-Jersey European Airways, which was later rebranded British European before becoming Flybe in 2002.

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.

Flybe 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 Exeter-based firm currently operates a number of domestic routes in Britain between cities which 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 £2.2 million for Flybe’s assets and operations.

Flybe completed the sale of its assets to the group in the deal worth only 1p per share.