Virgin Atlantic last night declined to comment after being tipped as a likely suitor for struggling Flybe.
The UK regional airline last week put itself up for sale amid mounting losses.
A bid for Flybe could allow Sir Richard Branson’s Virgin Group-backed airline to feed passengers from regional airports to its international long-haul network from the London hubs of Heathrow and Gatwick.
Little Red, Virgin Atlantic’s last venture into UK domestic flights from Heathrow, ran for just 18 months before being abandoned in 2015 due to low passenger numbers.
The airline is currently expanding a three-way transatlantic partnership with Air France-KLM and Delta Air Lines which is due to be finalised next year.
Virgin Atlantic declined to comment on “rumour or speculation” connecting it with Flybe reported by Sky News.
The report suggested that a tie-in with Flybe would provide opportunities to feed passengers onto Virgin Atlantic’s long-haul network and access valuable take-off and landing slots at capacity-squeezed Heathrow.
Flybe appointed bankers from Evercore to explore a number of “strategic options” including a sale last week as it announced a 54% fall in half year profits to £7.4 million.
Flybe confirmed at the time that it was in discussions with “a number of strategic operators” about a potential sale of the company.
Accountants from KPMG are assisting in financial planning as the Exeter-based airline attempts to ward off the threat of a future cash crunch.
Flybe has raised £5 million through the sale and leaseback of a hanger at Exeter airport and a further $5 million of loans secured against one of its Bombardier Q400 turboprop aircraft.
Southend airport owner Stobart Group, which failed in a bid for Flybe earlier in the year, is also believed to be looking reviving a deal.
They have a franchise agreement and were in merger talks in the spring, but failed to agree terms.
EasyJet ruled itself out of the bidding earlier this week.
Chief executive Johan Lundgren told BBC radio that the UK budget airline was always on the look-out, but there was nothing to report at this time.
“We are always looking for strategic opportunities if they arise and we can also take advantage of that given our strength in our balance sheet and our financial strength,” Lundgren said.
“But there is nothing to talk about at this moment in time, we don’t have any interest in this particular topic on Flybe at the moment.”