Struggling Flybe is in dispute with Monarch Aircraft Engineering (MAEL) over a terminated maintenance contract.
The Exeter-based regional airline, which put itself up for sale last month after issuing a full-year profit warning, terminated a contract with the aircraft repair company for maintenance services.
The airline accused MAEL of breaching the contract by withdrawing its services “unilaterally”.
“Flybe is very disappointed by these events, which appear to have been undertaken without due consideration of our business, customers and operations, and with no legal justification,” the carrier said.
But MAEL said it served notice on the contract with Flybe earlier this year.
The maintenance firm was understood to be concerned about Flybe’s financial difficulties and asked for an invoice to be paid early, City A.M. reported.
MAEL carried out a complex restructuring process in October. The company’s majority shareholder is now investment group Greybull Capital, which owned Monarch Airlines prior to its collapse last year.
A spokesperson for MAEL said: “Due to circumstances we cannot disclose, we decided to suspend repair and maintenance operations for Flybe on Friday 23 November.”
Virgin Atlantic and International Airlines Group (IAG) are reportedly in a bidding war for Flybe.