Flybe Group Plc's shares surged 40% this week after the Sunday Telegraph reported that Virgin Atlantic and British Airways owner IAG will battle it out to buy the regional airline.
Flybe has been in talks with multiple parties to sell itself as it grapples with falling demand, higher fuel costs and a weak British pound. Last week, it said Virgin was a potential buyer.
IAG is a frontrunner in the race to buy Flybe, the Sunday Telegraph reported. Sky News had previously reported that Stobart Group was also a likely suitor.
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Flybe declined to comment when contacted by Reuters, while IAG did not immediately respond to a request for comment.
Flybe has also said it would consider other options besides a sale, such as further reductions in capacity and costs.