Administrators EY announced that Flybe’s brand and remaining assets had been sold to Thyme Opco, a company affiliated to hedge fund Cyrus Capital.

Flybe was one of the first victims of the coronavirus when it went bust in March this year, following a sharp drop in demand for flights.

All flights were grounded and the UK business ceased trading with immediate effect on 5 March.

EY said it had agreed to a sale of Flybe’s business and assets, including the brand, intellectual property, stock and equipment, to Thyme Opco for an undisclosed sum.

The administrator’s statement said: “While the transaction is still subject to certain confidential conditions, the deal is expected to allow the Flybe business to restart operations as a regional airline in the UK under the Flybe brand in early 2021.

“Following today’s announcement, the administrators will work together with Thyme Opco, the Flybe management team and the UK Civil Aviation Authority to prepare for the relaunch of Flybe’s airline operations.”

A Thyme Opco spokesperson said: “We are extremely excited about the opportunity to relaunch Flybe.

“The airline is not only a well-known UK brand, it was also the largest regional air carrier in the EU, so while we plan to start off smaller than before, we expect to create valuable airline industry jobs, restore essential regional connectivity in the UK and contribute to the recovery of a vital part of the country’s economy.”

Any return to the skies would be likely to see Flybe focus on a small number of profitable routes.

The announcement saw a lift in the value of airline stocks, with shares in easyJet, IAG and Ryanair rising as investors became hopeful that a recovery for air travel could be on the horizon.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “More than 2,000 jobs were axed when Flybe went into administration, so competition for the positions the company will create will be fierce but a very welcome development for a sector which has been floored by the Covid crisis.

“However, given that Flybe collapsed even before the pandemic hit, the new owners will have their work cut out to make the airline viable again, particularly given that both easyJet and Ryanair have announced base closures to stop haemorrhaging cash as demand for air travel remains depressed.”