• Video report by ITV News Business and Economics Editor Joel Hills

We are witnessing something quite extraordinary, the gradual shutdown of the airline industry.

The slump in passenger demand and the imposition of travel restrictions around the world to slow the spread of the virus is putting unprecedented strain on airlines.

This morning Ryanair, Easyjet, Virigin Atlantic, IAG (which owns BA and Aer Lingus) have grounded aircraft, suspended routes and warned the tens of thousand of people who work for them that they will have to restrict hours and reduce pay.

TUI has suspended “almost all” of its holiday operations.

Even then, the message to government - with the exception of IAG - is that the industry will not survive without financial support from the taxpayer.

The government is being asked to cut taxes, under-write loans and help pay wages.

Ministers have to decide if they are willing to stump-up funding for an industry that financial markets currently view as high-risk.

This is a big ask. The government has responded by calling an aviation summit, which feels like an attempt to buy breathing space.

  • ITV Business Editor Joel Hills reports on how airlines are responding to the coronavirus outbreak.

In the last six months the government has allowed Thomas Cook and FlyBe to fail.

Both were troubled companies, but now large and hitherto successful employers are knocking at the door asking for help.

Airlines, and with them airports, are at the sharp ends of the shock that is hitting the economy - but a glance at the stock-market tells you investors believe all sectors of be affected as well as businesses, both large and small.

The official line is that the government will support healthy and viable businesses to tough out the next few months but there is no way of knowing how long or how deep this downturn will be.

And how does the government propose to identify who those businesses are?

Investors are currently unable to separate potential winners from losers and are selling shares in every company as a result.

Business models that worked rather well before the coronavirus outbreak may not be fit for purpose post-crisis if consumer behaviour changes permanently.

I covered the financial market upheaval during the financial crisis of 2007/2008.

I recall many extremely hairy moments but I don’t remember such a sustained period of what feels like panic.

Investors have lost their bearings and very significant central bank action is failing to calm things down.

This is partly because, as even central banks admit privately, there is a limit to what they can do currently. At least, a limit to what will prove effective.

We are experiencing the steady moth-balling of the supply side of the economy, as people are increasingly unable to go to work and either make stuff or provide services.

There’s pressure on governments to do more to prevent companies from failing, unemployment from rising and lasting economic damage being caused.

Last week’s Budget response, which felt chunky and well-designed, has been over-taken by events.There is now an urgent need for something more substantial.