Small Planet Airlines Italia has had its licence suspended.
Italian civil aviation authority ENAC says the carrier will not be able to operate flights after 19 January because the airline "failed the essential requirements relating to financial considerations for the maintenance of the licence".
ENAC cites in its decision EU regulation 1008/2008, which sets out "common rules for the operation of air services".
The authority says it has reminded the company of an obligation "to provide for the rerouting of passengers holding tickets, through agreements with other companies". Permission to sell tickets for flights beyond 15 February had already, "for the protection of passengers' rights", been withheld, ENAC indicates.
The Italian carrier has been independently managed and owned from Lithuanian charter carrier Small Planet Airlines since April last year following a management buyout of the latter. The Lithuanian carrier has been winding down its connections with Small Planet Airlines Italia, which is majority owned by Aeroservizi and was due to change its brand name at the turn of the year.
Small Planet Airlines chief executive and majority owner Vytautas Kaikaris, who sold his 5% stake in the Italian airline in April, says the latter's suspension will have no impact on either the Lithuanian carrier or its Polish subsidiary's operations.
Flightglobal's Ascend Online database lists two Boeing 737s in the fleet of Small Planet Italia: one owned by the Lithuanian carrier, and one owned by Osprey Aviation Ireland and managed by AAR Aircraft Sales & Leasing.
(corrects Small Planet Airlines Italia ownership and adds comment from Small Planet Airlines)