Flybe Group's shares surged 40% today after weekend reports that Richard Branson-founded Virgin Atlantic and Aer Lingus owner IAG will battle it out to buy the regional airline. 

Flybe has been in talks with multiple parties to sell itself as it grapples with falling demand, higher fuel costs and a weak British pound. 

On Friday it said Virgin was a potential buyer. 

IAG is a frontrunner in the race to buy Flybe, the Sunday Telegraph reported on Saturday, citing industry sources. 

Sky News had previously reported that Stobart Group was also a likely suitor.

Meanwhile, EasyJet and Ryanair have said they are not interested in buying Flybe. 

Flybe has also said it would consider other options besides a sale, such as further reductions in capacity and costs.