The Exeter-based airline said it is in talks with a number of "strategic operators" and is looking at cutting further costs and flight capacity amid challenging conditions in the industry.
Fall in demand
The announcement comes mere weeks after the airline issued a profit warning, following falling consumer demand, and a £29 million hit from rising fuel costs and the weakness of the pound.
Shares dropped by more than a third as a result of the alert and nearly 75 per cent has been wiped off the company’s stock market value since December.
However, since the news of its sale plans, shares have lifted by six per cent.
In half-year results, Flybe saw cost-cutting help lift underlying pre-tax profits to £9.9 million from £9.2 million a year earlier, but its group revenues fell by 10 per cent to £409.2 million after it cut capacity by nine per cent.
Chief executive Christine Ourmieres-Widener said, "There has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs.
"We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings."
Who is likely to buy Flybe?
Stobart Group, which already has a franchise agreement with Flybe, initially walked away from a bid for the airline in March after failing to agree on terms, but could now reportedly come back into the picture.
Flybe has 78 planes operating from smaller airports, including London City, Southampton and Norwich, and flies to destinations across the UK and Europe, carrying around eight million passengers per year.
The news of a potential sale sparked concerns for the carrier's 2,300 employees, with the plans described as a "bolt out of the blue" by the British Airline Pilots' Association (Balpa).
General secretary, Brian Strutton, from Balpa commented, "Balpa believes that Flybe is fundamentally a sound airline and we will scrutinise any offers to buy Flybe very carefully to ensure continued employment is protected.
"We also expect to be consulted by Flybe and potential bidders over any future plans they have for the airline and its employees."
But with the airline's profits taking a nosedive this year, news of a sale shouldn't come as a huge surprise, as Julie Palmer, partner at Begbies Traynor, explained.
“The combination of rising oil prices and weakened pound has led to a fall in profits and a sharp drop in share price, which fell by more than 35 per cent in October,” she said.
"Earlier in the year, the airline announced a new strategy that would see its fleet cut from 85 to around 70 aircraft by early 2020, in an attempt to improve profitability and increase revenue per seat.
“However, with further cost-saving measures planned and Brexit quickly approaching, which could potentially have an impact on access to routes across Europe, any investors need to strap themselves in and prepare for turbulence.”
Will the sale affect my flights?
Despite the airline putting itself up for sale, a spokesperson said the move would pose no threat to tickets and flights that had already been purchased as a result of the review.