Passengers were being advised to check the ATOL website for advice
More than 180 passengers were turned away at Bristol International Airport after the package holiday group XL went into administration.
Passengers who tried to check in at 0500 BST for a Tenerife flight were informed it was cancelled.
News of XL's situation first emerged at midnight, according to the airport.
"The administrators turned up in the morning to formally advise the airport the company had ceased trading," said chief executive Paul Kehoe.
Passengers due to take Friday afternoon's 1840 BST flight to Heraklion in Greece are being advised not to turn up at the airport, but to take advice from the ATOL website.
"There is an XL base here, there are clearly staff who will be affected by this decision," said Mr Kehoe.
"The other operators, like Ryanair, Easyjet, Thomas Cook, are rock solid, it looks like it's business as usual for all the others.
"The unfortunate demise of XL may help the other operators. It may be those passengers might want to fly with other carriers."
The XL Leisure Group, which operates XL airlines, flies to 50 destinations, mainly in the Mediterranean.
The Civil Aviation Authority (CAA) said 85,000 people could be stranded abroad and 200,000 have made advance bookings with the company.