Southampton Airport's biggest airline Flybe has gone into administration, putting more than 2,000 jobs at risk.
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 carrier narrowly avoided going bust in January but continued to lose money since then.
Airline sources suggest a drop in demand caused by the coronavirus "made a difficult situation worse" for Flybe.
Flybe was bought by a consortium of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019, after running into earlier financial problems.
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".
What should passengers do?
The UK Civil Aviation Authority (CAA) says any passengers expected to fly with Flybe should not travel to airports as all Flybe flights will be cancelled.
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 CAA are advising passengers to visit their website for all the latest updates.
- Free rail offered to Flybe staff and passengers affected by the collapse
The UK’s largest rail operator FirstGroup will offer a free ticket on its trains to all Flybe customers intending to travel today.
Customers will need to provide a boarding pass or other valid proof of booking for a flight today at the station ticket office where their journey begins.
FirstGroup says customers will be given a complimentary standard class ticket to their original flight destination.
Flybe employees should show staff ID to take up the same offer.
South Western Railway
SWR is offering free travel for customers who have booked flights with Flybe, as well as Flybe colleagues, for travel between 5 and Wednesday 11 March 2020 so they can make their planned journey.
Free travel will be available for Flybe customers and colleagues travelling between:
- Exeter and London Waterloo
- Southampton Airport Parkway
- London Waterloo
- Poole, Portsmouth and London Waterloo
Transport Secretary Grant Shapps tweeted it was "very sad" Flybe had gone out of business after serving passengers for four decades.
He said the Government was "urgently working" with the airline industry to "identify how key routes can be re-established by other airlines as soon as possible", and would be working with Flybe staff "to help them find new work in travel or other industries".
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.
Here's what passengers at Southampton Airport had to say on Thursday morning.
In a statement Flybe's Chief Executive Mark 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."