Italian budget airline grounded

Volare is Italy's first budget airline

Volare, Italy's first budget airline, has been grounded amid reports of a financial crisis at the firm.

The airline, which operates domestic and international flights, has cancelled all flights and suspended ticket sales on an indefinite basis.

Italy's civil aviation authority has called a meeting with Volare's management on Monday to discuss the airline's financial position.

The company which owns Volare employs 1,380 staff and operates 24 aircraft.

Bailiff's warning

"We regret to inform all passengers that starting from 19 November all our flights are cancelled and tickets are not on sale at the moment," the firm said on its website.

Volare began life as a charter airline in 1998, entering the low-cost market only last year.

It operates services between Italy's largest cities including Rome, Milan, Naples and Bologna.

It also flies to Paris, Prague, Barcelona, Madrid, Valencia and Bucharest.

The airline made a loss in 2003 and has large debts.

It received extra investment earlier this year but is understood to have been trying to raise more capital.

AFP news agency reported that a Volare flight from Paris to Bologna was delayed for more than four hours on Friday after a bailiff sought to issue a notice warning that the plane might be seized.

The bailiff arrived at the airport brandishing a document issued by Allsop Aircraft Leasing - from which Volare rents its planes - before the plane was due to leave, the agency said.

Following discussions between the bailiff and the plane's pilot, the flight was cleared to take off, the agency said.

The seizure notice was later lifted after discussions between the two companies.