Europe’s largest regional airline Flybe has collapsed into administration, sparking fierce condemnation from unions and politicians.
The carrier narrowly avoided going bust in January but continued to lose money since then.
A drop in demand caused by the coronavirus “made a difficult situation worse” for Flybe, an airline source told the PA news agency.
The airline announced in the early hours of Thursday it had ceased trading with immediate effect and that administrators had been appointed.
Crisis talks were held throughout Wednesday to try to secure a rescue package, but no deal was agreed.
The CAA said it has not been commissioned by the Government to operate flights to repatriate stranded travellers – as happened when airlines Monarch and Thomas Cook failed – because there is “enough capacity in the market for people to travel via alternative airlines, rail and coach operations”.
A Government spokesman said it has asked coach and train operators to accept Flybe tickets and airlines to offer reduced fares “to ensure passengers can make their journeys as smoothly as possible”.
In a statement, chief executive Mark Anderson said the company had made “every possible attempt” to avoid collapse but had been “unable to overcome significant funding challenges”.
“The UK has lost one of its greatest regional assets,” Mr Anderson said.
“Flybe has been a key part of the UK aviation industry for four decades, connecting regional communities, people and businesses across the entire nation.
“I thank all our partners and the communities we have been privileged to serve. Above all I would like to thank the Flybe team for their incredible commitment and dedication.”
The company said all Flybe flights were immediately grounded and advised all passengers not to travel to airports unless alternative flight arrangements had been made.
Speaking to Sky News, Transport Secretary Grant Shapps said the Government would be asking other travel operators “to assist” stranded passengers but did not say who would be paying for the arrangements.
“The concern is for people who have found themselves stranded and we’ve got people at the airport to be able to assist and we’re writing to all the other companies – coach companies, train companies – and asking them to assist,” he said.
Earlier on Thursday the Transport Secretary tweeted it was “very sad” the airline had gone out of business and said the Government would be working with Flybe’s staff to help them “find new work in travel or other industries”.
Unions and politicians have reacted angrily over the collapse of the company – which had a staff of around 2,000 – just weeks after the company narrowly avoided going under.
Oliver Richardson, national officer for major airline industry union Unite, told the PA news agency: “Unite members and the entire staff at Flybe, will be feeling angry and confused about how and why the airline has been allowed to collapse.
“It is simply outrageous that the government has not learned the lessons following the collapse of both Monarch and Thomas Cook that the much promised airline insolvency review has still not materialised.
“While other European countries are able to introduce measures to keep airlines flying when they enter administration, the UK remains unable or unwilling to do so.”
Andy McDonald, Shadow Transport Secretary, said the loss of Flybe would cause “real anxiety” throughout the country.
“Yet again more airline workers face an anxious future and the Government has to respond and provide them with all necessary support.”
UK Civil Aviation Authority chief Richard Moriarty said: “This is a sad day for UK aviation and we know that Flybe’s decision to stop trading will be very distressing for all of its employees and customers.
“We urge passengers planning to fly with this airline not to go to the airport as all Flybe flights are cancelled.
“For the latest advice, Flybe customers should visit the CAA website or the CAA’s Twitter feed for more information.
“Flybe also operated a number of codeshare partnerships with international airlines. If you have an international ticket you should make contact with that airline to confirm your travel arrangements.”
A spokesman from the Department for Transport said government staff would be on hand at all affected UK airports to assist Flybe passengers in making alternative arrangements.
“The vast majority of Flybe routes are served by different transport options, and we have asked bus and train operators to accept Flybe tickets and other airlines to offer reduced rescue fares to ensure passengers can make their journeys as smoothly as possible,” the spokesman said.
“We know this will be a worrying time for Flybe staff and our Jobcentre Plus Rapid Response Service stands ready to help them find a new job as soon as possible.
“We are working closely with industry to minimise any disruption to routes operated by Flybe, including by looking urgently at how routes not already covered by other airlines can be re-established by the industry.”