Plans to cut air passenger duty on all domestic flights are on the table as part of Flybe rescue negotiations.
The BBC reported that chancellor Sajid Javid is due to meet the business and transport departments today (14 January) to discuss the proposal.
Sources told Sky News that the regional airline asked for more time to pay APD to help ease a cashflow crisis, which is reportedly rising to tens of millions of pounds.
APD is currently set at £13 and upwards for a single journey, depending on the length of flight and cabins premiums.
The government could approve the request, but to avoid breaking EU state aid rules it would need to be implemented across all domestic carriers, not just for Flybe.
This comes after a number of national news outlets reported the airline was locked in emergency rescue talks on 12 January.
Flybe, which operates from Belfast, Birmingham, Manchester and Southampton, was bought by a Virgin Atlantic, Stobart Group and Cyrus Capital Partners consortium last year.
If it collapses, EY is reported to be on standby for the administration.
Flybe has not commented or confirmed if rescue talks are ongoing, stating: "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."
Cutting air passenger duty encourages flying and should not be messed with/reduced in order to save a struggling airline— Doug Parr (@doug_parr) January 14, 2020
IF this becomes response of govt confronting tricky industrial issue, can be little hope for UK decarbonisation effortshttps://t.co/ro910rgpV0