French carrier Aigle Azur entered receivership this week and now plans to cancel all flights amid its search for a takeover bid to save the company.
Earlier this week, the airline said it would still continue to operate flights during a “period of observation”, but these plans have now been scrapped.
The company said it had been “forced to resort” to an “unfortunate option that puts out clients, our teams and our partners in great difficulty.”
The airline is facing extinction despite generating revenue of $329 million last year, transporting 1.9 million passengers.
A statement released to employees stated: “The company’s financial situation and the resulting operational difficulties do not allow us to ensure flights after the evening of September 6."
Chinese conglomerate HNA Group, which also owns Hainan Airlines, is the largest stakeholder with 49%. American airline entrepreneur David Neeleman, whose companies include JetBlue and TAP Air Portugal, owns 32%, and French businessman Gerard Houa holds a 19% stake.
The airline flies mostly between France and Algeria, employs around 1,150 people and operates 11 Airbus aircraft (nine A320, and two leased A330).
Aigle Azur is now waiting for potential buyouts with a deadline for bids set to next week.