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, and is reportedly in talks over potential emergency financing after suffering rising losses, Sky News reported.

It reported that Flybe has been holding talks with the Department for Business, Energy and Industrial Strategy and the Department for Transport on whether the Government could provide or facilitate any emergency financing to the company.

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

Flybe was bought last February by a consortium led by Virgin Atlantic and Stobart Air last year.

Connect Airways, which also consists of Cyrus Capital, paid £2.2 million for Flybe's assets and operations.

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.

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.