United Kingdom airline Flybe entered administration — a practice similar to declaring bankruptcy — early Thursday morning.
In a statement, the company said that all flights have been grounded and that the business has ceased trading with immediate effect.
A spokesperson for the UK Department of Transport said the move followed a "commercial decision by the company," adding that the airline's financial difficulties were the immediate cause of its demise.
Airlines around the world have faced new financial hardships in recent weeks as the ongoing coronavirus outbreak has caused plummeting demand for air travel.
United Kingdom airline Flybe entered administration — a practice similar to declaring bankruptcy — early Thursday morning as the new coronavirus continues to impact air travel around the world.
The airline said in a statement that all flights have been grounded and that the business has ceased trading with immediate effect.
A spokesperson for the UK Department of Transport said the move followed a "commercial decision by the company."
"We recognize the impact this will have on Flybe's passengers and staff," the spokesperson said. "Government staff will be on hand at all affected UK airports to help passengers."
The spokesperson said bus and train operators have been asked to accept Flybe tickets and other airlines have been asked to offer reduced rescue fares to accommodate stranded passengers.
The airline's financial difficulties were to blame for the airline's demise, the spokesperson said.
Airlines around the world have faced new financial hardships in recent weeks as the ongoing coronavirus outbreak has caused plummeting demand for air travel. The virus, which originated in Wuhan, China, has killed more than 3,250 people and infected more than 95,000 globally. The coronavirus causes a respiratory disease known as COVID-19.
"Flybe's financial difficulties were longstanding and well documented and pre-date the outbreak of COVID-19," the spokesperson said. "We are well prepared for a potential outbreak and this week we have set out an action plan with details of our response."
UK transportation secretary Grant Shapps said that the government "really tried to do everything" it could to save the airline and was "absolutely gutted" by the news.
"We really tried to do everything we could back at the turn of the year but unfortunately though, with the situation that's developed with coronavirus, an already weak company just hasn't been able to survive," Shapps said, according to Sky News.
In July 2019, a consortium called Connect Airways, led by long-haul airline Virgin Atlantic, acquired the airline. Flybe was set to be re-branded as Virgin Connect and would serve as a regional airline operating short-haul flights as part of Virgin Atlantic's network, connecting to the larger airline's international hubs in London's Heathrow airport, Manchester, and Glasgow.
Virgin, which has found success as a long-haul operator but has struggled with building a regional and domestic feeder network, last attempted a regional operation in 2013.
Despite the takeover, Flybe continued to undergo significant financial difficulties over the fall and winter amid losses.
The impact of the coronavirus — and consequential anxieties and suspensions of business travel — on new bookings has had significant effects on the world's airlines. While larger airlines with more accessible cash flow have been able to reduce expenses to weather the slow-down, Flybe's already-precarious situation made it more difficult.
Flybe operated nearly 40% of UK domestic flights. Despite reduced travel demand amid the coronavirus, the cessation of services is likely to disrupt UK flight operations.
Read the original article on Business Insider