Low-cost carrier Zoom has cancelled all its scheduled flights after revealing it is to file for bankruptcy.
The Canadian-UK airline said it had no choice but to ground aircraft after an "unprecedented increase" in aviation fuel.
Zoom founders Hugh and John Boyle, who announced their company's demise in a message on the airline's website, said fuel bills had risen by as much as $50 million (£27 million) in one year.
They said the collapse was a "tragic day" for passengers and the airline's 600 employees.
"We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights," a statement explained.
"We have done everything we can to support the airline and left no stone unturned to secure a refinancing package that would have kept our aircraft flying.
"Even as late as yesterday we had secured a new investment package but the actions of creditors meant we could not continue flying."
British Airways and Virgin Atlantic are offering special fares for Zoom passengers following Thursday's announcement.Click here for more information