Mexicana, Mexico's largest airline by passengers carried, will halt all flights from Saturday, Transportation Minister Juan Molinar Horcasitas announced in Mexico City.
The action was announced after Tenedora K, an investor group that has acquired most of the embattled carrier's shares, announced that it was still seeking additional investors. The newspaper El Universal quoted Horcasitas as saying on Friday that Tenedora K could not keep Compania Mexicana de Aviacion afloat by itself.
Mexico's oldest airline had filed for bankruptcy protection earlier in August. Its holding company also owns budget carriers Click and Link.
Last year's flu outbreak damaged Mexico's vital tourism industry and hit Mexicana hard. The airline's pilot union has blocked company efforts to reduce labour costs.