The biggest backer of doomed airline Flybe is one of two frontrunners in the race to buy Virgin Australia out of administration.

Cyrus Capital has been shortlisted to take over the stricken company alongside Bain Capital, the US buyout fund founded by former Republican US presidential candidate Mitt Romney.

Virgin Australia went bust earlier in the coronavirus crisis after running out of cash following a collapse in global air travel, after frantic efforts by billionaire owner Sir Richard Branson to secure a taxpayer bailout fell flat.

Cyrus bought a stake in regional UK carrier Flybe in January 2019, as part of a consortium that also included Sir Richard’s other airline Virgin Atlantic and airport operator Stobart Group.

The 1p-a-share swoop proved futile a year later with Flybe collapsing into administration three months ago, before the pandemic roiled airlines worldwide.

Cyrus also co-founded Virgin America, a domestic US carrier that operated between 2007 and 2018.

Virgin Australia filed for bankruptcy in April when Australian ministers refused to step in. It was previously 10pc owned by Sir Richard’s Virgin Group.

Administrator Deloitte said it had whittled five interested parties down to the final two over the weekend. Further talks will now take place before binding offers are submitted, with plans for a deal to be agreed by the end of the month.

Cyrus’s approach has proved popular among Virgin Australia’s 10,000-strong workforce after it pledged not to impose sweeping changes such as transforming the firm into a low-cost carrier.

Deloitte said: "Bain Capital and Cyrus Capital are well-funded, have deep aviation experience, and they see real value in the business and its future.”