Wow Air has joined the growing list of failed European carriers.
The Iceland-based airline stopped flying overnight and urged passengers to look elsewhere for flights.
A short message on the Wow Air website said: “Wow Air has ceased operation.
“All Wow Air flights have been cancelled.”
Thousands of passengers are believed to have been left stranded by the collapse.
The future of the airline had been in doubt since the withdrawal of Indigo Partners from talks on an investment earlier this month.
The carrier flew from London Stansted and Gatwick in the UK.
“Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances,” Wow Air advised stranded passengers.
“Information on those airlines will be published, when it becomes available.”
Wow started flights in 2012 and grew to employ 1,000 people, carrying 3.5 million passengers last year in its 11 aircraft.
It operated both short- and long-haul routes, flying to Copenhagen and Alicante in Europe and Washington and Boston in the US.
Following the news, Rory Boland, Which? Travel editor, said: “Passengers will quite rightly be appalled that Wow Air was still selling tickets right up to the moment it collapsed knowing full well that any tickets sold would likely not be worth the paper they are printed on.
“You will need to check if you booked your flights as part of a package as this will mean you are ATOL protected and will be entitled to your money back.
“If not, you may still be able to claim through your travel insurance or card issuer but it will depend on your circumstances.”