In addition, Flybe said it reached a revised bridge loan of up to 20 million pounds to provide funding to Flybe Limited, of which 10 million will be available on Tuesday to support the business.

A number of improved agreements with banks have also been reached to improve liquidity, it added.

The new developments occur after the firm was not able to satisfy conditions for a 20 million pound loan to help its working capital requirements in light of a take over offer by Richard Branson's Virgin Atlantic, and Stobart Group and Cyrus Capital to buy Flybe for $2.8 million.

A joint venture company called Connect Airways - 40 percent owned by Cyrus' unit DLP Holdings and 30 percent each owned by Stobart Group's aviation unit and Virgin Atlantic - had won the backing of Flybe's board to buy the airline.

The consortium is aiming to rebrand the struggling British regional carrier.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)