Collapsed regional airline Flybe could restart operations as soon as next year, after a former shareholder stepped in to buy its remaining assets.

The airline plans to "start off smaller than before", its new owner Thyme Opco said, without giving further details.

Before its collapse in March, Flybe carried eight million passengers a year and ran 40% of regional UK flights.

However, there are questions over whether the airline still has a valid operating licence.

Flybe was a central carrier for many of the UK's smaller airports, operating 80% or more flights from Southampton, Exeter and Belfast City airports.

When it collapsed, it employed about 2,200 people, many in the Exeter area.

For the holiday resort of Newquay, for instance, it provided a much faster connection to London than its rail link, and for the Isle of Man, it had a contract to fly NHS patients for medical treatment.

While other carriers have stepped in to replace these routes, many of the flights it operated have not been saved, creating concern for those in the areas affected.

Deal breaker: Is Flybe's operating licence still valid?

After it went into administration in March, Flybe owned no aircraft. Its new owners have principally agreed to purchase the airline's brand and web address.

The big question mark surrounding this deal is whether Flybe's airline operating licence is still valid.

The licence contains access to slots at major airports such as Heathrow and Manchester which before the pandemic were worth their weight in gold. Control of some slots did, temporarily at least, pass to other airlines.

Regulators at the Civil Aviation Authority (CAA) initially revoked the airline's licence when the company went into administration.

The CAA now needs to make a judgement call on the licence and there might need to be a legal hearing.

One source said the process was at a "very premature stage".

'Extremely excited'

The news was welcomed by pilots' union Balpa.

"I hope this signals the start of a relaunch of Flybe and I've written to all the parties involved to discuss this with them," said the union's general secretary, Brian Strutton.

Thyme Opco, which is controlled by hedge fund executive Lucien Farrell, will buy the airline's brand, intellectual property, stock and equipment.

"We are extremely excited about the opportunity to relaunch Flybe," a spokesman said.

"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."

Simon Edel, who works for Flybe's administrators EY, said the announcement would welcomed by communities around the country previously served by Flybe.

"The restart of this iconic brand, which was once Europe's largest regional airline, will provide a potentially significant boost to aviation jobs, regional connectivity and local economies."

Mr Farrell runs New York hedge fund Cyrus Capital's operations in Europe. Cyrus was a shareholder of Flybe, along with Sir Richard Branson's Virgin Atlantic, before its collapse.

Thyme Opco is 51%-owned by a firm called Thyme Investco, which itself is 51% owned by Mr Farrell, giving him overall voting control, according to filings at Companies House.

Cyrus Capital manages $4bn (£3.1bn) of investors' money and owns a stake in the Co-operative Bank in the UK.

The value of the Flybe sale was not disclosed. The deal must pass regulatory hurdles before completing.