Eastern Airways will this week ground its three-times daily services between Manchester and London Stansted. The airline, which is best known for its services catering for the oil industry up and down the east coast of the UK, only launched the service in October 2007 after flights on the same route by Air Berlin ended.

An Eastern Airways spokesman said: “We have been operating on the route for 13 months and have tried to increase demand by introducing more services, additional capacity and lower one-way fares to stimulate market but the tough economic climate, higher fuel costs and increased charges at airports have meant that we have had to take this tough decision. All our services are monitored to ensure they remain viable.”

Passengers with flights after 30 November have been offered full refunds. The airline faced stiff competition from Virgin Trains services between Manchester and London and also from VLM services between Manchester and London City airport.

Eastern says it will start a new route between Aberdeen and Oslo in January and will also launch services from London City Airport to Amsterdam Schiphol next spring.

London City is also to get new services to the Isle of Man from 19 January next year after Aer Arann announced it would launch three services a day on the route, targeted at the financial community. The launch will reinstate services lost when Euromanx was declared bankrupt earlier this year.

DTI Minister David Cretney MHK said: "The London City route has proved to be very valuable for the Isle of Man’s economy by providing a convenient link to the centre of London both for our business community and for business visitors from London and internationally. I am delighted to see the restoration of a frequent service to London City by Aer Arann, with the excellent timings they have obtained, and I know this will be enthusiastically welcomed throughout the Island's business community."