The British government is to consider reforming air passenger duty on domestic flights as part of a plan to save Flybe from collapse.

The regional airline earlier this week refused to comment on speculation over its financial health, promoting further questions.

Flybe operates more than half of UK domestic flights outside London, and offers unique connectivity to regional airports.

The Exeter-based company carries about eight million passengers a year from airports including Birmingham, Manchester, Southampton, Belfast City, Cardiff and Aberdeen, to the UK and Europe.

However, despite a recent takeover by a consortium led by Virgin Atlantic and Stobart Air, questions over its financial viability remain.

A deferment of Flybe’s air passenger duty bill would allow the carrier to design a new rescue plan, and potentially secure more than 2,000 jobs.

By applying the move to the whole industry, the government would avoid breaching EU state aid rules.

It is thought the move could save Flybe up to £100 million over three years.

Air passenger duty is charged on all departures from airports in the United Kingdom over a certain weight.