After three weeks of filing for bankruptcy protection Mexicana de Aviacion has suspended all flights, as a last-minute rescue package failed to materialise.
The action will also apply to two budget carriers affiliated with Mexicana.
The Eighty Nine year old airline, the third oldest in the world, has debts of about $800m (£500m).
Mexicana de Aviacion had earlier axed some of its routes and had stopped selling tickets.
The airline flew 220 routes to 65 destinations including Madrid, London, Montreal, Chicago and cities in Central and South America.
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