This is the third airline that is reported to have shut down operations in the last eight months after Air Carnival and Air Pegasus.
Vijayawada-based airline Air Costa has stopped its operations after aviation regulator the Directorate General of Civil Aviation (DGCA) suspended its flying licence.
The airline had reported a Rs 130 crore loss on revenue of Rs 327 crore for fiscal 2015-16.
The Deccan Chronicle reported that Air Costa Chief Executive Officer (CEO) Vivek Chowdary said that a lack of service hangars for their Embraer E-190 and E-170 aircraft in India was the main reason for unsustainable costs which forced the airline to shut down operations.
In March, two of its planes were grounded at the Hyderabad airport by GE Capital Aviation Services for defaulting on payments.
The airline suspended operations on February 28, 2017. CEO Vivek Chowdary told the Deccan Chronicle that he hoped to raise funds through private equity.
DGCA data for December 2016 also showed that Air Costa had the highest number of cancellations at 13.65 percent.
Air Costa began its operations in 2013 and flew to six cities, namely Ahmedabad, Jaipur, Tirupati, Hyderabad, Bengaluru and Chennai.This is the third airline that is reported to have shut down operations in the last eight months after Air Carnival and Air Pegasus.