Malév Hungarian Airlines has ceased operations under pressure from rising debt.
A statement from the Hungarian flag-carrier read: “At 05:00 GMT, after 66 years of almost continuous operation, Malév will no longer take off.”
The future of the airline had been uncertain following a decision by the European Commission ordering the carrier to repay state aid given between 2007 and 2010.
“Although in recent days there was still hope for the continuation of operations, and passenger confidence was undiminished, partners have now lost confidence in us,” said Malév chief executive Limburger Lóránt.
“As this has happened, partners have begun to ask for payment in advance for services they provide.
“This cash outflow has accelerated to such an extent that the airline is now untenable situation.
Malév has been ordered to repay more than €130 million, making its debts unsustainable.
Lóránt was quick to condemn the decision: “It should also be known that, despite the best of intentions, the European Union condemned the airline.”
The carrier employed 2,600 people and is responsible for close to half of all air traffic at Budapest Liszt Ferenc Airport.
Malév is also part of the oneworld airline alliance, which was quick to offer assistance.
Partners British Airways and (member-elect) airberlin have offered discount repatriation fares, while Finnair also has a base in the Hungary and is offering assistance.
“According to the government regulation which entered into force on January 31st 2012, assistance can be provided to those passengers who purchased their valid tickets before Malév ceased and whose travel dates are on the suspension day or on the following three calendar days,” read a oneworld statement.
“In addition, to those who already travelled to their destination on the suspension day or before and possess valid return tickets on Malév flights on a date not later than February 29th 2012.
“Those who are entitled are going to have assistance from Malév by rerouting their tickets to other flights or other modes of transportation.”