EuroManx, the regional airline based in the Isle of Man, filed for voluntary liquidation on Friday in the face of mounting losses.

The airline is owned by Quest Aviation Services, of which Robin Southwell, chief executive of EADS UK, part of the European aerospace and defence group, is a non-executive director.

The carrier, which has been loss-making for several years and went through a restructuring two years ago, has been hit by rising fuel prices and falling passenger numbers.

It said it faced “insurmountable obstacles” and was ceasing operations.

EuroManx was operating on four routes from the Isle of Man to Liverpool, Manchester, London City and Belfast City airports, and was carrying more than 200,000 passengers a year.

It operated two Dash-8 turboprop aircraft and leased an ATR 72 turboprop from Aer Arann, for which the Irish regional airline also provided the crew.

EuroManx had faced growing competition, in particular from Flybe, the largest European regional airline.

Flybe has become the leading carrier flying to the Isle of Man in the past two years, with eight summer routes including Liverpool and Manchester as well as Birmingham, Gatwick and Luton.

Flybe offered on Friday to rescue many of EuroManx’s passengers, saying those with bookings for Manchester and Liverpool could re-book free with Flybe.

Customers to London City could also re-book with Flybe, subject to availability, for travel until the end of the month.

Mike Rutter, Flybe chief commercial officer, said the airline would be working with the Isle of Man government to offer jobs to some EuroManx employees.

Airlines are being hit by the surge in fuel costs, and there has been a growing number of insolvencies in recent weeks in the US and among start-ups.