Nationwide Airlines has ceased operations until further notice, the airline announced on Tuesday.

"Our cash-flow has become critical and as a result (we) have decided to voluntarily cease all flight operations until further notice," said chief executive Vernon Bricknell.

"We apologise to our loyal customers for any and all inconveniences experienced."

The closure came as news to trade union Solidarity, which had heard rumours of it from workers, but was still trying to confirm it with management on Tuesday afternoon, said spokesperson Jaco Kleynhans.

"It is unclear to us what is the next step," he said, adding that the union's concern was to save its members' jobs.

The talk over the past few months had been of selling a share of the company and "we've been positive about that".

Company could not "just close"

It would have enabled the company to keep operating. As it was, the company could not "just close".

"If you just cease operations the company will go bankrupt," he said.

"If you just shut it's not going to be long before you're bankrupt. If you close, you still have costs... and very quickly you'll have no money left."

Nationwide's troubles began on 7 November last year when an engine fell off its Boeing 737-200 on take-off for Johannesburg from Cape Town International Airport. The aircraft landed safely half-an-hour later.

On 30 November, the South African Civil Aviation Authority (CAA) grounded Nationwide when it suspended its approval of the airline's aircraft maintenance organisation and the certificates of airworthiness of Nationwide's fleet of aircraft.

Putting Nationwide out of business

Asked at the time whether the CAA had given any thought to the possibility of the grounding putting Nationwide out of business, CAA legal executive manager executive Nheri Magoai said: "We do sympathise with them. It's just an unfortunate event. We hoped we could avoid it.

In his statement on Tuesday, Bricknell said Nationwide had resumed operations in December and January and "attained a gradual recovery of the business".

"However, in the months of March and April we faced a 30 percent increase in fuel costs coupled with a decrease in passenger load factors," he said.

On 27 February, the company announced that it had secured a Black Economic Empowerment deal with the African General Equity Group under which AGE agreed to acquire a 51 percent stake in the airline's group of companies.

"This is a very exciting process as this will bring many new resources to the table -including amongst others, the recapitalisation of the company," Bricknell said in announcing the deal.

Opportunities for improvement

"We will openly discuss plans for fleet renewal, employee shareholding options, improvement of services, current resources and reporting structures, and opportunities for improvement," he continued.

However, on Tuesday Bricknell said that work towards "securing investment by a black empowerment consortium" had not come to fruition.

Nationwide operated international flights to London and Zambia, and domestic flights to and from Cape Town, Durban, Port Elizabeth, George, Mpumalanga and Johannesburg.

The telephone at Nationwide's head office went unanswered on Tuesday, with a message advising that its reservations and administrations offices were closed.

The message reminded callers of the airline's operating hours and referred them to its website to make and pay for reservations.

There was no announcement of its closure on the website.

The statement on the closure was made available through the Airports Company South Africa.