The ad, in which the headline "Next airline to go bust?" was accompanied by a list of airlines and odds, attracted one complaint because it implied the airlines might go into administration.
Other airlines punters could bet on going bust included FlyGlobespan, Spainair, Air Berlin, SkyEurope and Wizz Air.
Paddy Power said they were market leaders in providing odds for topical news stories, and after two airlines went bust, they received numerous requests for odds on which airline would do so next, and as such considered the campaign a legitimate betting market.
The bookmaker said that the odds were dictated by the flow of money, without any manipulation from the company.
The Advertising Standards Authority ruled that the campaign suggested that "some airlines were more at risk of going into administration than others".
It said: "Because the ad suggested that the named airlines, particularly those with the shortest odds, might go into administration we concluded it unfairly discredited those businesses."
This article was first published on brandrepublic.com