Iceland’s Wow airline has postponed all flights as the company tries to complete talks over raising new funds.
The carrier, which started flights in 2012 and has 11 aircraft, started formal talks with investors on Tuesday.
It said bondholders had approved a plan to convert their bonds into shares.
Wow said that all passengers had been informed via text message or email, and they could cancel their flight for a full refund or change their reservation to the next available service.
The airline said it was in the “final stages” of bolstering its finances, but said “all flights have been postponed until documentation with all parties involved have been finalised”.
It said further information would be given later on Thursday.
A number of airlines have run into financial trouble recently.
Earlier this year, Germany’s Germania filed for bankruptcy. Low-cost carrier Norwegian underwent a major fund raising, blaming rising fuel prices and currency fluctuations for its troubles.
The UK’s struggling Flybe was taken over earlier this month for just one penny a share.
Even giant budget airline Ryanair reported its first quarterly loss since March 2014 last month.