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Oneworld carrier Mexicana has suspended all flights three weeks after filing for bankruptcy protection.
Mexico's transport minister Juan Molinar announced the winding up of operations in Mexico City yesterday.
Low-cost affiliate carriers, Link and Click, have also ceased operations.
The 89-year-old airline - one of world's oldest aviation companies - has debts of about half a billion pounds.
It was forced to file for bankruptcy protection after cost-cutting talks with trade unions ended in stalemate.
Last week an investor group annouced its intention to buy a majority shareholding in the company.
But with some 1,000 cabin crew jobs at risk the government moved to block the purchase.
Mexicana, like airlines around the world, suffered in recent years with the global recession and record high oil prices in 2008.
However, the airline was decimated financially when the swine flu outbreak in Mexico last year lead to the temporary collapse of inbound and domestic tourism.