Microsoft has cancelled development of Microsoft Flight, as well as Project Columbia, described as "a Kinect interactive TV project designed for children" by Kotaku. The site originally reported that the entire Vancouver studio responsible for these games was being shut down, but an update from MS clarifies that these projects are at an end, but not the studio itself. Here's the official statement:

Microsoft Studios is always evaluating its portfolio of products to determine what is best for gamers, families and the company, and this decision was the result of the natural ebb and flow of our portfolio management. Many factors were considered in the difficult decision to stop development on "Microsoft Flight" and "Project Columbia," but we feel it will help us better align with our long-term goals and development plans. For "Microsoft Flight," we will continue to support the community that has embraced the title and the game will still be available to download for free at http://www.microsoft.com/games/flight/.