The cash-strapped airline, until recently India’s second-biggest carrier, has struggled to keep its fleet in the air.

India’s debt-stricken Jet Airways has announced the suspension of all operations after failing to secure emergency funding from lenders.

The carrier, saddled with roughly $1.2bn of bank debt, has been teetering for weeks after failing to receive a stopgap loan of about $217m from its lenders as part of a rescue deal agreed in late March.

“Jet Airways is compelled to cancel all its international and domestic flights. The last flight will operate today,” it said in a statement on Wednesday, adding that the decision would take “immediate effect”.

The airline said it was forced to take the step as a consortium of lenders had turned down its request for emergency interim funding.

Without the funding, the airline would not be able to pay for fuel or other critical services to keep operations going.

The company, which until November was India’s second-biggest airline by market share, employs more than 20,000 people.

Separately on Wednesday, two sources at state-run banks told Reuters news agency that the banks had rejected the 4bn rupees ($58m) that Jet had sought to keep itself temporarily afloat, while its lenders attempted to identify an investor willing to acquire a majority stake in the airline and attempt to turn it around.

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“Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding,” said one of the bank sources directly involved in the airline’s debt resolution process, who declined to be named as he is not authorised to speak to media.

At its peak, Jet operated more than 120 planes and well over 600 daily flights. The airline has been forced in recent weeks to cancel hundreds of flights and to halt all flights to overseas destinations.

The crisis at Jet, which owes vast sums to suppliers, pilots, lessors and oil companies, has deepened in recent weeks as its lessors have scrambled to deregister and take back planes, in a sign the bailout plan had failed to assuage their concerns.

India’s aviation regulator said on its website on Wednesday that lessors had applied to deregister another four Boeing 737 planes.

An analysis of the latest data disclosed by the Directorate General of Civil Aviation shows that Jet‘s lessors have, so far, sought to deregister and repossess at least 48 planes operated by Jet. Once deregistered, lessors are free to reclaim a plane and lease it to another airline.

The rapid exodus of planes risks further eroding value from the carrier, even as lenders scurry to find an investor willing to buy a majority stake in the debt-laden airline and attempt to turn it around.