“Level Europe has been impacted by the unprecedented crisis caused by the COVID-19 pandemic,” the airline said in a statement, adding that it had “ceased trading with immediate effect”.
“Once insolvency proceedings are filed, an Austrian Court will appoint an Administrator,” the statement added.
Around 200 jobs in Vienna are thought to be at risk, along with roughly 40 in Amsterdam.
The airline had been launched in 2018 by parent company IAG, which owns British Airways and Iberia.
Level Europe was designed to serve short- and medium-haul routes within the continent.
IAG also runs long-haul flights using the Level brand from Paris and Barcelona which are not affected by Friday's announcement, the company said.
Aviation has been one of the sectors most severely hit by the coronavirus pandemic, with many carriers having to file for bankruptcy, implement hefty cuts or ask governments for huge public rescue plans.