Travel has taken a hit from the coronavirus outbreak.Credit:kristjan.porm@fairfaxmedia.com.a
Accounting firm EY will be called in to handle the administration,once Flybe's aircraft are all back on the ground from flying later on Wednesday,said the source familiar with the situation and who spoke on condition of anonymity.
A representative for Flybe declined to comment on the possibility of administration or the airline's longer-term financial situation.
Flybe's failure would put 2000 jobs at risk and cause a headache for Prime Minister Boris Johnson and his plan to boost regional transport links.
Flybe would be among the first airlines to go out of business since the emergence of coronavirus,which surfaced in China last year and has since claimed around 3000 lives and sharply reduced travel demand.
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Some major airlines have said they will need to cut costs to weather the downturn in bookings,particularly since late February when Europe's worst outbreak emerged in Italy.
British Airways,easyJet,Lufthansa and United Airlines are amongst those announcing cost-saving measures.
Flybe was already in financial trouble before coronavirus hit.