Hungarian flag-carrier Malev ceased operating early on Friday morning after 66 years of almost continuous service, after its planes were held overseas for unpaid debts.
Hungary's national airline had been placed under extraordinary protection from creditors and a receiver was appointed by the government earlier this week.
Malev said its suppliers had lost confidence and started to demand advance payment for their services, while the government could no longer provide cash injections for the company following a European Union ruling last month.
"This has accelerated the outflow of cash to such an extent, that by today the situation of the airline has become unsustainable," Malev said in a statement.
"The board, in order to minimise losses, has ordered a halt in operation of the Hungarian national airline."
All flights were grounded from 0500 GMT, Friday.
The Hungarian government withdrew funding on the 2nd February 2012 and the closure was announced this morning (3rd Feb 2012).
The Malev website (http://www.malev.com/) has closed with just a holding message providing basic information to passengers.
