Regional European airline Flybe was locked in survival talks on Sunday night, less than a year after being bailed out by a Virgin Atlantic-led consortium.
The British carrier has been trying to secure additional financing amid mounting losses.
EY, the accountancy firm, has been put on standby to handle an administration of Flybe Group, according to aviation industry sources.
The British government is understood to have been briefed on the crisis at Flybe in the last few days, with more than 2,000 jobs at risk if the company collapses.
One source close to Flybe said on Sunday night that the UK's Department for Transport had been working to determine whether the government could provide or facilitate any emergency financing to the company.
If Flybe is unable to put together a rescue deal, it would be the second major airline to collapse in Britain in four months - following Thomas Cook Group's implosion last September.
Flybe operates about 75 aircraft and serves more than 80 airports across Ireland, Europe and the UK.
It operates services from Dublin and Cork airports.
In Britain it has a significant presence at airports including Belfast, Birmingham, Manchester and Southampton.
Under a deal that completed last March, a consortium comprising Virgin Atlantic, Stobart Group - which owns Aer Arann - and Cyrus Capital Partners acquired Flybe's operating assets.
Cyrus Capital owned the largest share of a newly formed company called Connect Airways, with 40%, while the other partners owned 30% each.
Mark Anderson, a Virgin Atlantic executive, was installed as Connect Airways's chief executive.
The consortium had pledged to pump €116m into Flybe's turnaround plan, with the airline being re-branded as Virgin Connect from later this year.
Insiders said, however, that Connect's proposed financing requirements had become more onerous, potentially leaving Flybe on the brink of collapse.
It was unclear on Sunday how any rescue financing involving the British government might be structured.
The regional airline did come close to outright collapse a year ago amid an acrimonious takeover battle that left shareholders fuming that their equity had been left worthless.
Flybe launched a formal sale process in the autumn of 2018, blaming a toxic cocktail of currency volatility, rising fuel costs and Brexit-related uncertainty.