A budget airline in South Africa says that it has applied for liquidation.

1Time Airline said Friday that all of its operations have been grounded with immediate effect after it applied for business liquidation.

The low cost airline that flies in southern Africa filed and operated under business rescue since Sept. 17. It said a financial consultant advised the company "there was no viable way forward to recapitalize the airline to a profitable state."

The firm says it had been in negotiations with creditors since March and had short-term debt of about 320 million rand ($38 million).

Hundreds of passengers booked with the airline were stranded after the announcement.

Another budget airline in South Africa, Velvet Sky, shut down earlier this year because of financial problems.