The private airline, which has cancelled all of its charter flights, said it was planning to go into a receivership due to financial hardship.
"Unfortunately we have to admit that the VIM-AVIA company has found itself in a difficult economic situation," the company said in a statement on Tuesday.
"Working capital has dried up, financing has been frozen and airport services have been suspended," the carrier said, adding that it was counting on state help.
"And because the airline cannot fly without additional financing we are planning to go into a receivership," the company added.
VIM-AVIA is Russia's 10th largest carrier in terms of passenger numbers.
The Association of Tour Operators appealed on the government to avert an industry-wide crisis, saying the battered airline had accumulated between 3 billion rubles ($52.2 million) and 10 billion rubles ($174 million) in debt.
The association added that some 200,000 passengers including 100,000 Russian tourists who had planned to go on vacation in Russia and abroad may be affected.
"The suspension of the airline's work will first and foremost affect these flights which would lead to a collapse of the tourist and aviation markets," the industry group said.
Irina Tyurina, spokeswoman for the Russian Tourism Industry Union, said the struggling airline had sold tickets to fly between 50,000 and 80,000 tourists to and from Turkey, Greece, Crimea and the Russian Black Sea resort of Sochi.
Experts say that Western sanctions, low oil prices and a weak ruble have eroded Russians' purchasing power and dealt a heavy blow to the aviation industry, but also others.
A decision by the Russian government to ban charter flights to Turkey amid tensions with Ankara in 2015 also affected airlines like VIM-AVIA.
Transaero, Russia's second-largest airline and the country’s largest privately-owned carrier, collapsed in 2015 due to heavy debts.
