Jersey-based Blue Islands suspended operations on Friday (14 November) and cancelled all future flights, saying it was "considering its options".
Passengers have been advised not to travel to their departure airport unless they have made alternative arrangements with another carrier.
In a statement, a Blue Islands spokesperson said the Government of Jersey had pulled its support for the carrier after 26 years serving the Channel Islands.
Loganair will take over several of Blue Islands routes, including flights to and from Guernsey, Exeter, Bristol and Southampton. It is understood Loganair plans to base several aircraft in Jersey, and hopes too to launch a Guernsey-Southampton route as well.
Guernsey-based Aurigny, meanwhile, is putting on additional Guernsey-Jersey and Guernsey-Southampton flights for travel through to mid-December.
"We are deeply saddened by the news that Blue Islands, our fellow Channel Island airline, ceased operations with immediate effect on 14 November," said Aurigny.
"Our heartfelt thoughts are with each and every member of their team, many a friend, at this very difficult time."
Aurigny has pledged to share details of "sustainable, long-term schedules" for both routes beyond 17 December "in the coming days".
Chief executive Nico Bezuidenhout said Aurigny, which has served the Channel Islands since 1968, had been able to develop interim schedules to assist Blue Islands passengers within 18 hours of the carrier ceasing operations, adding additional frequencies for Christmas and the remainder of the winter would be announced soon.
Loganair chief executive Luke Farajallah described the situation as "another sad day for regional aviation" following the recent demise of Eastern Airways.
No further government support
Blue Islands passengers with direct bookings are advised to contact their bank or payment card provider. Those with Aurigny codeshare bookings are advised to contact the Guernsey outfit, while any who have booked through an agent or other operator should contact them "for advice and guidance.
"After 26 years serving the Channel Islands, we deeply regret that Blue Islands has suspended its operations,” said a spokesperson.
"After very constructive dialogue with Government of Jersey in recent months, including what we understood to have been ongoing assessments of the future options, we were informed this afternoon [Friday] that they are unable to provide further support.
"This has meant that we now need to suspend flying immediately whilst we consider the options available and how we can help our customers, staff and stakeholders."
