Cork-based airline Jetmagic has collapsed, leaving 100 people out of a job.
Hundreds of passengers have been forced to arrange their return flights to Ireland after the company went under last night.
Jetmagic said in a statement the company had "not proved to be a viable operation" and that "expected passenger demand did not materialise, especially in terms of business travel."
The airline had already announced that a number of routes - including Brussels, Rome and Milan - had been, or would be, discontinued.
The decision by competitors to introduce flights to some of Jetmagic's most successful destinations had also impacted on the company's business forecast for 2004, the company said.
Jetmagic enjoyed high passenger loads on a number of routes - particularly those to holiday destinations, including Alicante, Barcelona, Nice, Nantes and Milan. But business routes to Brussels, London City, Edinburgh, Liverpool and Paris were "very disappointing" - with only Belfast City achieving satisfactory levels.
The company was set up with a €10 million investment last spring. Despite expressions of interest in Jetmagic the compny statement said "the short term financial requirements of keeping the business going proved insurmountable".
Chief executive Mr Barry Perrott blamed the collapse on the company's failure to attract enough business customers. "It's a tough job to persuade businesses to move from their traditional operations, particularly when a lot of airlines tie up businesses in global travel deals," he said. "Once somebody had tried us, they came back - people loved the service - but the problem was getting people to try us in the first place."
Jetmagic has set up a free phone number to provide information and advice: 1800-301060 within the Republic of Ireland, and +353-21-4518915 from outside the State.