UPDATE 1-Slovak-based airline SkyEurope files for bankruptcy

Mon Aug 31, 2009 7:42pm EDT

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BRATISLAVA, Sept 1 (Reuters) - Slovakia-based low-cost airline SkyEurope Holding AG SKYV.VI, which was struggling to restructure its debts, has filed for bankruptcy, according to an announcement on the Vienna bourse Web site on Tuesday.

"The Slovak court-appointed restructuring trustee of SkyEurope Airlines a.s. filed today for the opening of bankruptcy proceedings of SkyEurope Airlines a.s., the operating subsidiary of SkyEurope Holding AG, due to the lack of sufficient interim funding to finance ongoing operations," the bourse site en.wienerborse.at/ said.

"All flights of SkyEurope Airlines a.s. are suspended with immediate effect," it added.

The company was not available for an immediate comment.

The airline, which had started its operations in 2001 and flew its first passenger in February 2002, obtained a three-month creditor protection in Slovakia in June and was since trying to restructure and pay its outstanding debt.

Earlier on Monday the company cancelled all flights from Slovakia until midnight on Monday, facing a suspension in flights from the Czech capital of Prague starting on Tuesday due to outstanding bills.

The economic slowdown has hit the airline hard and its financial problems have added to the woes as it lost even more passengers because of concerns it may go insolvent. In July, passenger traffic declined by 37 percent year-on-year.

The company posted a net loss of 18.94 million euro in its fiscal year ending Sept. 30, 2008, compared with a 15.68 million euro loss in the previous fiscal year.

(Reporting by Martin Santa; Editing by Andre Grenon, Phil Berlowitz)

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