Image copyright
Getty Images
Flybe is being bought for £2.2m by a consortium including Virgin Atlantic and Stobart Group.
The sale comes after the Exeter-based airline's warning in October that it would lose £22m because of poor demand, a weaker pound and higher fuel costs.
Shareholders in Flybe will receive 1p a share, while the consortium, which also includes venture capital firm Cyrus, will inject £100m.
It will operate under the Virgin Atlantic brand.
Flybe shares closed on Thursday at 16.38p.
The shares had been trading at more than 30p before the profits warning, which sparked a downward spiral in the price.
The consortium, known as Connect Airways, will initially lend £20m to Flybe to support the on-going operations of the airline.
A further £80m will be invested in Flybe, which describes itself as Europe's largest regional airline.
Christine Ourmières-Widener, Flybe's chief executive, said: "The industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which have put pressure on short-term financial performance".