Jet Airways has suspended all flights after a search for emergency funding failed.
The Indian carrier said its last flights had now departed as it was not able to pay for fuel and other critical services.
However, the carrier said it holds out hope of returning to the skies, saying in a statement: “We are hopeful that we will be able to bring the joy of flying back to you soon.”
The grounding follows an escalating financial crisis at the carrier.
In the past few days Jet has been seeking emergency funding, without success.
A statement explained: “Late last night we were informed by State Bank of India, on behalf of the consortium of Indian lenders, that they are unable to consider our request for interim funding.
“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.”
The carrier operated 600 domestic and 380 international routes, including out of London, Amsterdam and Paris.
Jet had grown rapidly in recent years before it started to lose market share after the entry of low-cost airlines like IndiGo and SpiceJet.
The carrier has US$1.2 billion in debt – it employs some 23,000 people in India.
While it has more than 120 planes, reports suggest it has been operating just five in recent days.
In a somewhat eccentric statement, Jet held out of the hope of flying again.
“Tomorrow is another day and tomorrow provides us with new hope, new opportunity and new expectations,” read a statement.
“We know that India is better off with a flying Jet Airways, and so do our potential investors.
“With a smile on our face and pride in our hearts, we have become the flag-bearer of warm Indian hospitality the world over.”
The CAA offered advice to British travellers impacted by the closure.
Rory Boland, Which? Travel editor, again questioned why airlines are permitted to sell tickets, even when collapse is imminent.
He 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.”