Peruvian Airlines has suspended all operations “until further notice,” after its bank accounts were frozen by Peruvian customs authorities over tax irregularities, the company announced Oct. 4. 

In a statement posted on its website, translated from Spanish, Peru’s second-largest carrier said its accounts were embargoed as a penalty for underpaying taxes on two Boeing 737 MAX aircraft it received, leading to a “lack of liquidity that affected our operations.”

On Sept. 30, Peruvian said the embargo forced it to suspend flights for half a day, after it could not come up with the funds to pay fuel providers. That incident also “created a distrust with travel agencies that significantly lowered their sales, affecting even more the cash flows of the company ... a situation from which we could not recover.”

The Lima-based airline said it was making efforts with new investors in an attempt to refloat the company, “in order to continue providing the important service that Peruvian represents for national aviation as it is the only Peruvian company that operates in the skies of Peru for more than 10 years.”

Passengers were reportedly stranded at Jorge Chávez International Airport in Lima Oct. 4, with limited access to information from Peruvian. The company did not provide any guidance to passengers who had already booked flights, saying only, “We deeply regret the inconvenience that our passengers are [experiencing] and we reiterate our commitment to provide a prompt solution.”

Peruvian is the most recent casualty of a challenging airline environment following a spate of European airline bankruptcies last month including Aigle Azur, Thomas Cook Airlines, XL Airways and Adria Airways.

Peruvian last operated a fleet of 11 Boeing 737 family aircraft, according to Aviation Week fleet data services. Its network served 11 domestic destinations in Peru from a main hub at Lima’s Jorge Chávez Airport. 

Ben Goldstein, Ben.Goldstein@aviationweek.com