Lithuania's troubled FlyLAL airline said Saturday it has suspended its operations after a buyout deal by Swiss investment firm SCH Swiss Capital Holdings failed. Airline officials said it terminated a preliminary agreement with the Swiss company after it failed to pay $1 million that would have cleared FlyLAL's debts and potentially saved it from bankruptcy.
Company Chief Executive Vytautas Kaikaris said the suspension was one of the few options left to try to save his company. "We believe that the decision to suspend the operations is the most appropriate at this moment. We are doing this trying to stem further losses and prevent further deterioration in creditors' situation," Kaikaris said in a statement. The Swiss company, which previously announced it would restructure and modernise the airline, was not immediately available for comment.
Since it was privatised in 2005, FlyLAL has struggled with large debts, primarily to Vilnius International Airport, where it is based. Carrier's debts now total some 90 million litas ($26 million). The suspension left many passengers stranded and seeking either reimbursement or alternative routes. Some 30,000 FlyLAL tickets had been sold and were still valid before Saturday's announcement.