Indian carrier Jet Airways has suspended all domestic flights in India after failing to secure funding.
The last flight will operate today as it was not able to pay for fuel and other services.
The airline said it had no other option and the move was temporary.
All international flights were grounded last week.
The airline has 123 aircraft and is India’s biggest private airline. Reports say that just five have been in use, according to the BBC.
Jet Airways has debts of around £885 million and is seeking £165 million in emergency funding.
The Indian government had asked state-run banks to step in with a bailout plan for the airline which employs 23,000 people.
“Late last night [Tuesday], Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they are unable to consider its request for critical interim funding,” the airline said.
CEO Vinay Dube said yesterday: “Since no emergency funding from the lenders or any other source of funding was forthcoming, it would therefore not have been possible for us to pay for fuel or other critical services to keep the operations going.
“Consequently, with immediate effect we are compelled to cancel all our domestic and international flights. This decision has been taken after painstaking evaluation of all alternatives and after receiving guidance and advice on the same from the board of directors of Jet Airways.
“Over the last several weeks and months we have tried every means possible to seek funding, both interim as well as long term funding, to keep our operations going. Unfortunately, despite the very best of our efforts, we have been left with no other choice today.
“A decision like this is never easy to make, but without the interim funding, which we have been repeatedly requesting for, we are simply unable to conduct flight operations in a manner that delivers to the very reasonable expectations of our guests, employees, partners and service providers.”
He added: “We will now await the bid finalisation process by SBI and the consortium of Indian Lenders and will continue to support the bid process initiated by the lenders.”
Which? Travel editor Rory Boland said: “Passengers will quite rightly be outraged that yet another airline headed for collapse was able to sell tickets to unwitting customers right up to the moment it grounded its planes; once again leaving holiday and travel plans in tatters and passengers out of pocket.
“Passengers who booked tickets worth £100 or more on their credit card should contact their provider to claim the cost of the airfare back. Or, alternately, check their travel insurance policies, although they will not necessarily offer cover for scheduled airline failures such as this.”
The CAA has issued advice on its website to affected passengers.