(CNN) - Jet Airways has finally been grounded.
The once-mighty Indian carrier said in a statement Wednesday that it was suspending all flights after failing to secure emergency funding from the country's banks.
The airline has been struggling for months to stay in business and the announcement follows weeks of speculation over its fate.
"This has been a very difficult decision but without interim funding, the airline is simply unable to conduct flight operations," Jet Airways said in statement.
Shares in the company fell more than 30% in Mumbai on Thursday.
The carrier's collapse is the biggest in India since the failure of fugitive billionaire Vijay Mallya's Kingfisher Airlines in 2012. It's a huge blow to India's aviation industry as it struggles to meet soaring demand while keeping costs low.
It also comes at an inopportune time for Indian Prime Minister Narendra Modi. He is seeking a second term in a national election due to conclude on May 23. Opposition parties have criticized his government for failing to bring down unemployment among India's millions of young people.
Jet Airways said it was informed late Tuesday by a consortium of lenders, led by the government-run State Bank of India, that they would not be able to provide more cash.
The company described the suspension of flights operations as temporary, but the absence of funding puts more than 20,000 jobs at risk.
"Above all, the airline would like to express its sincere gratitude to all its employees and stakeholders that have stood by the company in these trying times," it said in its statement.
Passengers would be informed about the closure via email and text messages, and would be able to claim a refund, it added. The airline's operations had already shrunk to 40 flights on five aircraft by Tuesday, according to local media.
The carrier was founded in the early 1990s by Naresh Goyal and went on to dominate India's airline industry, accounting for nearly 20% of passengers carried by Indian airlines in 2018.
Yet in recent years it struggled to cut costs to compete with newer budget airlines like IndiGo. Rising oil prices and the increased volatility of India's currency, the rupee, only made matters worse.
Goyal stepped down in late March as part of a planned $218 million bailout that handed control to the banks. But that bailout did not materialize, with Jet Airways saying Wednesday the banks were "unable to consider its request" for funds to keep it flying.
The banks will continue their search for a private investor to buy 75% of the airline. The deadline for bids is May 10.
"We are actively working to try and ensure that the bid process leads to a viable solution for the company," the consortium said in a statement shared by Jet Airways.
Etihad Airways, which acquired a 24% stake in Jet in 2013, has been touted as a possible buyer, but Abu Dhabi's national carrier has problems of its own after losing about $4.9 billion in three years.
Etihad said it would support passengers affected by the suspension of flights.
"We continue to work with Jet management, lenders and key stakeholders in the context of the lender-managed effort to restructure the company," an Etihad spokesperson added.
Jet isn't the only Indian airline in dire straits — the country's national carrier, Air India, is surviving on billions of dollars of taxpayer money after a failed attempt to privatize it last year.
Swati Gupta and Zahraa Alkhalisi contributed reporting.
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