CityJet is to discontinue its service from Cork to London City Airport from June 26, just eight months after its launch.
The airline said that there was not enough demand for the service to make it commercially viable.
Pat Byrne, CityJet’s Executive Chairman said: "All the indicators suggested there would be strong support from both business and leisure communities, especially in view of the very significant convenience of City Airport due to its close proximity to the City of London and indeed the West End.
"There is a cost of this convenience as London City is probably one of the more expensive airports in Europe for airlines from an operational standpoint.
"Unfortunately, with the route now in its eighth month of operation, we have been unable to achieve our passenger load factor and average fare targets. Consequently, our 18 weekly flights failed to gain a market foothold sufficiently to ensure a continuity of this service."
Cork Airport expressed its disappointment at today's announcement.
Niall MacCarthy, Managing Director at Cork Airport, said: "It’s very disappointing that CityJet has decided to discontinue its innovative London City route having invested significantly to develop the market over the past eight months.
"They are a great airline customer and we welcome the continuance of their summer season services to Nantes and La Rochelle as well as the Menorca charter service."
CityJet however said it is firmly committed to operating its new summer routes from Cork to La Rochelle and Nantes and its charter series to Menorca.
Mr Byrne said he is convinced that there are good potential opportunities for CityJet at Cork and that the airline will continue to assess the market in the region and pursue other opportunities if and when they arise.
CityJet said it will be in direct contact with all affected passengers who have booked on its website or through the CityJet Contact Centre so they can avail of a full refund.
Anyone with queries can contact the airline on 01-5251823 (Ireland), 0207 660 6060 (UK) or firstname.lastname@example.org
Customers who booked via a travel agency will be contacted directly by their agency.
Following today's news, Aer Lingus launched fares of €35.99 for travel from Cork to Heathrow in June, July and August.
Aer Lingus operates four times a day from Cork to London Heathrow all year round.
Aer Lingus Chief Commercial Officer, Keith Butler said: "Today's announcement of the suspension of the Cork to London City service serves as a reminder of the challenges facing all stakeholders in making new routes successful.
"While the suspension is disappointing news for the Cork and Munster region, Aer Lingus is committed to serving the London market."
Ryanair have also announced a €16.99 seat sale on its flights from Cork to London Gatwick and London Stansted.
The seats are available for travel in June, but must be booked on the Ryanair.com website by Sunday, May 15.