Danish low-cost carrier Sterling Airlines is to file for bankruptcy, having fallen victim to the financial crisis which has enveloped Iceland.
Sterling is owned by Northern Travel Holding, which was originally set up two years ago by three Icelandic investment companies. It was subsequently taken over by Icelandic investor Palmi Haraldsson, who became its sole shareholder.
The Copenhagen-based carrier has been suffering from heavy costs associated with fuel prices. While its shareholder has been supporting a restructuring of the company, which was due to last into next year, the collapse of the Icelandic financial system has scuppered the effort.
Sterling says in a statement that the shareholder is "unable to continue" supporting the firm and negotiations to secure other investment have failed.
"During the last few weeks, the management, board of directors, and the shareholder have been fighting a battle to keep the company alive," it says. "Sadly, this has not had a positive outcome, and we have therefore decided to file for bankruptcy."
Sterling operates a fleet of over 20 Boeing 737 aircraft, leased from a variety of sources.