US business-class airline Eos has filed for Chapter 11 bankruptcy protection and said it will cease operating flights by Monday, the BBC reported.
The firm said it had "insufficient cash to continue operations" after failing to win an investment that would have sustained the firm until 2009.
Eos was launched two years ago, flying between New York's JFK airport and the UK's Stansted.
Its collapse follows the demise of rival Maxjet last December.
The entire airline industry has been battling surging fuel prices, competitive pressures and declining consumer spending, particularly in the US and UK.
Eos will operate its final flights between London's Stansted Airport and New York's Kennedy Airport on Sunday.
Its Sunday flights in the opposite direction have been cancelled.
Chief executive Jack Williams said the announcement was "particularly regrettable" after the airline had succeeded in negotiating terms for a round of financing despite the "extremely challenging economic and credit environment".
"Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome," he added.
The business class-only airline launched in 2005 with a fleet of Boeing 757s with 48 seats that reclined into flat beds.