Aer Arann, one of the Ireland's best known companies, has filed for court protection from its creditors as the company tries to rescue their ailing business.
The Irish commuter airline has been granted an interim examinership by the High Court to try to restructure its operations and attract external investment.
For Aer Arann, the effects of the recession have been compounded by the volcanic ash cloud from Iceland which curtailed flights over Europe earlier this year. Reeling from 12 million Euro in losses in 2008 and 2009, the airline had thought it could come in on budget this year due to a new franchise agreement signed with Irish national carrier Aer Lingus earlier this year.
However, losses of 6 million Euro have been incurred by the airline to date this year, largely due to the the volcanic ash disruption.
Following an upcoming High Court hearing on September 8, Aer Arann expects to remain in examinership for up to 70 days.
"The airline will operate as normal in order to preserve as many of the 320 jobs in the company as possible and the hundreds of associated jobs in airports and aviation support services companies," a spokesperson said in a statement to the press, adding that there would be no disruption to its current schedule.
Examinership has been available to ailing but potentially viable companies in Ireland as a means of recovery since 1990 and is granted by the Irish High Court.