The CBI has said the Government should not bail out failing companies a speculation continues to circle around the future of the part Stobart Group owned airline Flybe.

CBI deputy director General Josh Hardie described reports that the UK’s biggest regional airline was on the brink of collapse and in crunch rescue talks with the Government as “deeply worrying”.

But – echoing the line from Prime Minister Boris Johnson – Mr Hardie said it should not fall on the Government to bail out the airline, which acquired by the Connect Airways consortium of Virgin Atlantic, Stobart Group's subsidiary Stobart Air and Cyrus Capital in a £2.2 million deal in February last year.

According to reports Flybe has asked the Government to defer its air passenger duty (APD) bill for this year of £106m for three years, in a move it says will help it survive through tough winter trading conditions.

The issue was due to be discussed at a meeting between Chancellor of the Exchequer Sajid Javid and the business and transport secretaries Andrea Leadsom and Grant Shapps on Tuesday, according to Sky News.

They reported that the deal would be conditional on Flybe's three shareholders pumping tens of millions of pounds into the loss-making carrier.

In response Mr Hardie said: “The CBI is clear that it’s not the role of government to bail out failing companies.

“But it’s right the Government examines what help it can provide, given the importance of regional connectivity to so many people’s jobs and livelihoods.

“More broadly, the new Government has a huge opportunity to look at the overall cost of doing business and to support growth through high quality, sustainable infrastructure. That’s what will ultimately drive shared prosperity and level up growth across all.”

Airlines claim APD – expected to be worth 3.7 billion to the Treasury in 2019/20 – restricts connectivity and passenger growth.

Passengers on domestic flights pay £26 in APD for a return trip, with higher rates for longer flights and premium cabins.

Commenting on the emerging Flybe saga, Prime Minister Mr Johnson told the BBC: “It's not for Government to step in and save companies that simply run into trouble.

“But be in no doubt that we see the importance of Flybe in delivering connectivity across the whole United Kingdom.

“We're working very hard to do what we can, but obviously people will understand that there are limits, commercially, to what a government can do to rescue any particular firm.

“But what we will do is ensure that we have the regional connectivity that this country needs.”

The future of Flybe had looked brighter following the Connect Airways takeover.

Flybe put itself up for sale in November 2018 after a series of profit warnings and difficulties including falling demand, rising fuel costs and the weakening of the pound.

Connect Airways were hailed as its saviour after shareholders voted through the deal – despite attempts by high-profile Cumbrian businessman to take control, first in a solo bid and second heading up a group of investors.

If it collapses, Flybe would be the second UK airline to fail in four months, following the demise of Thomas Cook.

Around 2,000 people are employed by the airline, which flies around eight million passengers a year to 170 destinations across Europe.

While Flybe and the Government have declined to comment on the speculation, union Unite has demanded action from the Government.

It wants it to implement both the Airline Insolvency Review and the Insolvency and Corporate Governance Review to ensure that Flybe continues to operate.

"It is not acceptable for the Government simply to prepare for failure,” it said.