Aer Arran in bankruptcy prote+ction.
The airline said the ash cloud had added to its problems
The Irish regional airline, Aer Arran, has entered a bankruptcy protection process after suffering losses of 18m euros since 2008.
The High Court in Dublin has appointed an interim examiner to the airline.
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That is a process of Irish company law which protects a firm from its creditors while it comes up with a restructuring plan.
The company, which employs 320 people, said the move would not affect day-to-day business.
Aer Arann added that there would be no impact on customer travel or bookings.
Volcanic ash.
The decision of the company's board to apply for examinership followed two years of loss-making trading.
It said the airline had been on budget for this year, but was badly affected by the disruption caused by volcanic ash from Iceland.
The airline lost around 6m euros in both 2008 and 2009. Losses of 6m euros have been incurred so far this year.
Aer Arran flies from City of Derry airport to Dublin and Sligo.
A service between Belfast City and Cork was suspended in July.
Meanwhile the High Court in Dublin has also appointed an examiner to McInerney Homes, one of Ireland's best-known house builders.
The move was sought by its parent company McInerney Holdings, which is trying to restructure its debts and find new investment for the group.
McInerney's UK and Spanish divisions, as well as its commercial arm Hillview Developments, are not affected by the court move.