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Originally published Tuesday, September 1, 2009 at 11:30 AM

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SkyEurope goes bankrupt, stranding passengers

Budget airline served cities in Central Europe, including Vienna and Prague; some other airlines are offering "rescue tickets" for stranded SkyEurope customers

BRATISLAVA, Slovakia — SkyEurope, a Central European discount airline, said Tuesday it has filed for bankruptcy and that all its flights, sales and operations have been suspended.

The company cited the "lack of sufficient interim funding to finance ongoing operations."

Around the world, many airlines have been on the defensive for two years, cutting flights and firing workers — first to absorb rising fuel prices, then to ride out recession. Some have been forced into bankruptcy.

The troubled SkyEurope obtained credit protection in Slovakia in June. It reported a loss of close to euro60 million ($85.63 million) in the 2007-2008 business year. SkyEurope was founded in 2001 and began operations in February 2002. It has not been profitable since. It operated services to more than 20 European cities from bases in Bratislava, Vienna and Prague. The airline is a Boeing customer, flying 737s. The Boeing order Web site shows SkyEurope orders for five 737s still unfilled.

Vienna international airport stopped servicing departing SkyEurope flights in the mid-August because the airline failed to meet a deadline for paying outstanding debts and it was forced to operate those flights from nearby Bratislava.

Prague's airport had announced it would not service SkyEurope flights starting Tuesday, if it fails to pay its debts.

SkyEurope spokesman Tomas Kika was not immediately available for comment.

The airline advised passengers who paid for flights with a credit card to seek refunds at their credit card issuing banks. It said passengers have to purchase return flights from other airlines.

A number of airlines have offered stranded passengers various "rescue fares."

Ryanair, Europe's major budget airline, has offered one-way tickets for SkyEurope passengers from Bratislava to four destinations in Europe, including a one-way trip for euro25 ($38).

"SkyEurope's failure underlines the risk of flying with an airline that is not financially stable," said Ryanair spokesman Stephen McNamara.

Others include an offer from Czech Airlines CSA to fly to 20 European destinations for euro50 ($72) one-way.

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Several hundred passengers were stranded at two Croatian airports that SkyEurope was flying to — Zadar and Dubrovnik.

The head of Dubrovnik airport, Tonci Peovic, said it "expects the embassies" of Slovakia, Austria and the Czech Republic — the destinations of Tuesday's and Wednesday's flights — "to find a solution" for the passengers.

Seattle Times business reporter Dominic Gates contributed to this report.

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