Carlisle airport owner Stobart Group has revealed that talks have been held over the sale of a stake in its Southend airport.

As it published a trading update on the London Stock Exchange, it confirmed that discussions with a "development partner" had been ongoing for months about a 25 per cent investment – valued at around £700 million to £800 million.

But no deal has been reached and the talks have been put on hold due to the coronavirus outbreak.

In its trading update, Stobart Group said its full-year performance for its aviation and energy divisions were broadly in line with expectations, but added that the uncertainty driven by the covid-19 pandemic had impacted on Southend and its airline partners have warned they will be cancelling routes.

It added: "These actions are likely to continue on a rolling basis for the foreseeable future and could result in the grounding of the majority of airline fleets.

"There is currently no certainty regarding the extent or length of the virus' impact and it is therefore not possible to provide meaningful guidance on forecast passenger numbers for 2021 at this time.

"Given the current market conditions, additional liquidity is likely to be required and the group is actively reviewing the most appropriate sources of funds to cover the period during which the airport is affected by the covid-19 virus."

It said the group had moved quickly to take measures to conserve cash and reduce its cost base.

Warwick Brady, chief executive of Stobart Group, said: "Despite the current challenges presented by the covid-19 virus, we continue to own and operate aviation and energy assets with significant underlying value.

"It is impossible to say what structural changes will occur to the aviation industry in the coming months. However, ultimately the current crisis will pass, and people will continue to want to fly in and out of one of the world's largest travel markets."

The trading summary said its rail and civils division traded below expectations following delays to the award of new contracts through Network Rail's Control Period 6 and one ongoing legacy contract.

It added that demand for waste fuel to be supplied to renewable energy plants is expected to continue and the division has contingency plans in place for its workforce should covid-19 continue to spread across the UK.

Earlier this month, Stobart Group was forced to "write down" £50 million when Flybe slumped into administration.

It was part of the Connect Airways consortium – which also includes Virgin Atlantic and Cyrus Capital – which completed its takeover of Flybe last year and ploughed around £135m to keep it in the air.

But it put the loss-making carrier into administration after crisis talks with the Government, which had included a potential £100m emergency loan, broke down.

The trading update said: "A number of guarantees and potential lease obligations exist between the group and the separate subsidiaries of Connect Airways, being Stobart Air and Propius, which have been impacted by the collapse of Flybe.

"Stobart Group is actively evaluating how best to address and manage these liabilities and is in discussion with stakeholders regarding the most appropriate solutions."