After already having been forced to temporarily suspended flights in 2005 and 2006 due to budgetary constraints, Cosmic Air ceased its operations in 2008.

Financial problems became public in November of the same year, when the airline had to halt its domestic operations after the state-owned Nepal Oil Corporation refused to sell it fuel unless it cleared past debts of 125 million rupees.

By, then Cosmic air flew only to Kolkata, Mumbai and Varanasi also, limited cargo flights continued into India western provinces Gujarat Ahmedabad.

[citation needed] After one year of suspension of its operations, Cosmic Air restarted scheduled services in October 2007.

[9] Cosmic Air regularly served the following destinations from its hub at Tribhuvan International Airport, which were cancelled either at the closure of operations or before:[10][11] Cosmic Air also operated scheduled mountain sightseeing flights from Kathmandu to Mount Everest range.