Uruguay's flagship airline Pluna has declared insolvency, one day after announcing the indefinite suspension of all flights due to the company's financial difficulties.
Company president Fernando Pasadores made the announcement in a radio interview on Friday. Pluna executives said the next step would likely be to liquidate the company, which was taken over by the state last month.
The state had originally owned 25 percent of shares, but took control of the company after the withdrawal of private consortium LeadGate, which owned 75 percent.
Despite attempts to find a new shareholder, the company ran short of funds, which "makes it impossible to continue operations under these conditions," Pasadores said.
After LeadGate's departure, the Uruguayan government reached out to Canadian airliner Jazz Air, a minority member of the consortium, but failed to reach an agreement.
Pasadores explained the company's monthly revenue of about $15 million was "not enough to pay the costs" of operation.
The suspension of flights comes just ahead of a popular travel season, with students about to go on break.
The company has a fleet of 13 Bombardier CRJ900 aircraft and some 900 employees. Six of the airplanes operated on lease will be returned, and the remaining seven will be sold.
Pluna operated flights connecting Uruguay to Argentina, Brazil, Chile and Paraguay. The company carried some 1.5 million passengers annually.