Eastern Airways, which operated seasonal flights between Jersey and the north east of England, has stopped flying and returned planes to their leasing companies.
The regional airline has filed a "notice of intention to appoint an administrator", a legal document which gives the company ten days' grace from creditors while it seeks an alternative to liquidation.
As of Monday lunchtime, all Eastern Airlines flights have been cancelled and the leased aircraft in its fleet have been returned to their owners.
The UK Civil Aviation Authority is urging passengers due to fly with the airline not to go to the airport and to visit its website for the latest information.
Eastern Airways flew between Jersey, Humberside, and Teeside airports throughout the summer, but, in the last few weeks, the airline operated only four regular scheduled services.
They included several "public service obligation" routes backed by local governments in Scotland and Cornwall to ensure vital connectivity links are maintained.
Reflecting on the news, our Chairman, Carl Walker, said: "As Eastern Airways looks set to cease operations after 28 years, it's important that here in the Channel Islands, we don't take our vital air links for granted.
"With Eastern Airlines looking unlikely to be in a position to fly to the North East of England next summer, and Loganair's previously announced flights to Southampton yet to go on sale, the lack of competitive transport links is leaving Islanders inconvenienced and out of pocket."
In July, Loganair announced plans to compete against Blue Islands on the route between Jersey and Southampton from early 2026, but while the airline's other routes for next year have gone on sale, there's currently no sign of its promised Jersey links coming to fruition.
Carl added: "While the Council appreciates there is a cost of doing business and airlines need to remain financially viable, the high cost of tickets and some airlines levying extra charges for choosing seats or taking a bag is turning off-Island travel into a luxury commodity which many Islanders can no longer afford.
"We'd like to see airlines thriving with busy planes full of passengers both on and off the Island, but the current cost of travelling has meant many people are choosing to only do so when it's essential, sometimes having to pay hundreds of pounds for the privilege."

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