Flybe Group is mulling a sale or merger with a rival following a profit warning due to high fuel prices, weak demand and currency concerns. The airline's directors say a takeover is necessary to preserve its future of the UK airline.

The Group is undertaking a comprehensive review of various strategic options, including further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources, as well as a potential sale of the Company.

Evercore was selected by Flybe as the financial advisor to handle talks surrounding the potential deal.

Flybe is already in discussions with a number of strategic operators about a potential sale of the Company.

Ireland's Stobart Group is said to be a potential candidate, as it has previously bid for the UK carrier but was rejected.