Air Australia, formerly known as Strategic Airlines, has shut down after running out of cash.
All planes have been grounded and flights cancelled, leaving thousands of passengers stranded as administrators step in to take control of the airline.
The Brisbane-based airline, which launched little more than three months ago, few domestically to Brisbane, Melbourne, Perth, Derby and Port Hedland, with international flights to Denpasar, Phuket and Honolulu.
The airline warns it's unlikely to resume "any flights in the short to medium term."
"In the short term, the fleet will be grounded" according to a statement issued by Air Australia. "It currently appears that there are no funds available to meet operational expenses so flights will be suspended immediately. For clarity, it also appears highly unlikely there will be any flights in the short to medium term."
Qantas CEO Alan Joyce, quoted on Channel 7 news, promised assistance from the Red Roo and Jetstar: "If the (Air Australia) passengers come to a Qantas desk, a Jetstar desk, show their ticket, we'll give them a ticket for the same value they've paid with Air Australia."