Flybe, Europe's biggest regional airline, has collapsed into administration, leaving Southend Airport braced for a "short-term hit".

The carrier narrowly avoided going bust in January but has continued to lose money.

A drop in demand caused by the coronavirus "made a difficult situation worse" for Flybe and administrators announced in the early hours of this morning that it had ceased trading with immediate effect.

Crisis talks were held throughout the day on Wednesday to try to secure a rescue package, but no deal was agreed.

Britain's train companies - including c2c - have now agreed to provide free travel to stranded Flybe staff and customers over the next week, industry body the Rail Delivery Group said.

Travellers should show proof of their employment or planned journey - such as employee ID, boarding card or flight confirmation - to train company staff at stations.

Rail Delivery Group director of nations and regions Robert Nisbet said: "We know how distressing the news about Flybe is for their staff and customers, which is why train operators have arranged free travel to help them get to their destinations."

Stobart Group - part of the consortium which bought Flybe in February 2019 - said the ability of its Stobart Air subsidiary to trade was "not directly impacted" by Flybe's collapse, but that Southend Airport would see a short-term hit.

It said: "As a result of this news, London Southend Airport will see a short-term impact, with Flybe having planned to operate 10 routes from the airport from spring of this year.

However, the long-term prospects of that airport remain compelling."

Belfast City Airport is one of those airports worst hit by the collapse, with 81 per cent of its flights operated by the carrier.

An airport spokeswoman said: "In light of Flybe entering administration, passengers booked to travel with Flybe should not travel to the airport."

Colin Neill, chief executive of Hospitality Ulster, an organisation representing the hospitality industry in Northern Ireland, said: "This is simply devastating news for Northern Ireland.

"The regional connectivity that Flybe offered was vitally important to tourism and our wider hospitality sector here, without it there will be a huge impact on visitor access.

"The knock-on effect of fewer visitors and tourists means that this sounds alarm for our pubs, restaurants and hotels at a time when coronavirus is compounding the sector's problems.

"Great Britain is our largest tourism market and without that regional connectivity, the hospitality sector is going to take a real hammering. Our only hope in the short term is that other carriers can increase capacity so that visitors can come here and not be put off by Flybe's collapse.

"This is a very clear reason why air passenger duty needs to be scrapped immediately and we call on the Chancellor to wake up to this grave situation and cancel APD in his Budget only a week away."

Transport Secretary Grant Shapps said: "We're all a bit gutted - Flybe is a household name, we've been flying with them for 40 years and we really tried to do everything we could back at the turn of the year.

"Unfortunately, with the situation that has developed with [coronavirus], an already weak company, I'm afraid, just hasn't been able to survive."

He added: "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.

"Then, of course, the people who worked for Flybe, a couple of thousand staff, we will be right alongside them to try and help them get into their next employment."

Stobart said it was writing down £50.3 million from its investments in Flybe.

It said the consortium owners were "deeply disappointed" that the future of Flybe could not be secured.

Stobart added: "Flybe had shown promising signs of a turnaround despite the delay to receiving merger control clearance from the European Commission for its acquisition.

"However, despite the best efforts of all, not least the Flybe people, the impact of Covid-19 on Flybe's trading means that the consortium can no longer commit to continued financial support."

The Civil Aviation Authority 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".

Tim Alderslade, chief executive of Airlines UK, the industry body representing UK-registered airlines, said: "Flybe's problems were known to many, and the sector as a whole is going through an incredibly tough period with the coronavirus hitting bookings and dampening demand, and this is being felt across the board.

"That said, this is now the fourth UK airline to go out of business in two years.

"The Government is right to say aviation is a commercial proposition and the market should win out - but they are not using the policy levers at their disposal to help the sector.

"APD (Air Passenger Duty) is the prime example of a disproportionate and penalising policy that is actively holding us back.

"Leaving the EU presents ministers with opportunities to intervene - for example getting rid of the double domestic APD anomaly, reforming EC261 (EU passenger compensation rules) or using PSOs (Public Service Obligations) in a more imaginative way - and these should be explored asap, with next week's Budget presenting the perfect opportunity."