The Cyprus-based airline announced on Wednesday night (October 17) it had cancelled all flights and urged passengers not to attempt to travel.
Passengers with tickets are advised to contact their card provider or travel agent for refunds.
In a statement, the airline said all Cobalt operations had been “indefinitely suspended” and that all future flights or services “will be cancelled and will no longer operate”.
Cobalt operated around 20 flights in and out of the UK a week including a daily Heathrow-Larnaca service, as well as Gatwick-Larnaca, Stansted-Larnaca, Gatwick-Athens and Manchester-Larnaca services.
The airline was founded in 2015 following the collapse of Cyprus Airways and entered service in July 2016, based at Larnaca international airport.
Prior to Wednesday’s announcement, Cobalt flew 21 routes to 12 countries and is understood to have employed around 200 people.
Reports in Cyprus suggest the airline had been unable to find additional investment beyond primary backer Air Avic Joy, a Chinese firm which held a 49% stake in Cobalt. The Cyprus Mail further reports the company’s liquidity issues stemmed from Chinese government restrictions on foreign investments.
In a statement, the Cypriot Ministry of Transport, Communication and Works said talks were under way to negotiate the “smooth and best possible” repatriation operation.
The ministry said passengers should buy a single economy ticket for their repatriation and keep all evidence and receipts to qualify for a refund.
“The remaining passengers due to fly with Cobalt Air in the next seven days will be informed with subsequent announcements for arrangements for their repatriation,” the statement added.
Despite Cobalt’s troubles, it announced a new Larnaca-Cairo route earlier this week, due to launch in November.
In August, it announced plans to offer agents 3% commission on all new bookings to Cyprus and Greece made before the end of the year.
It comes just a fortnight after Primera Air collapsed into administration, and a year since the high profile failure of Monarch Airlines.
The Foreign Office on Thursday issued fresh travel advice following Cobalt’s suspension of services.
"Cobalt Aero has suspended operations and all flights, including those between the UK and Cyprus, have been cancelled," said the FCO.
"The Cyprus Ministry of Transport has advised any British nationals who were due to complete the return leg of their journey to the UK on a Cobalt flight today (October 18) to keep proof of purchase for an alternative one-way ticket (economy class), as information will be provided on reimbursement by the Republic of Cyprus in due course.
"All other passengers with flights with Cobalt in the next 7 days are asked to consult the airline and Cyprus Ministry of Transport websites for further information. You should also monitor this travel advice for further updates."