Cyprus’ national airline will lose its operating license and stop flights after the European Union ruled that it had illegally received tens of millions of euros in state aid, officials said Friday.

Finance Minister Harris Georgiades and Communications Minister Marios Demetriades said that Cyprus Airways will cease operations right away and that an administrator will be appointed to wind down the company.

The European Commission ruled that money-losing Cyprus Airways, which is nearly 94 percent government-owned, must pay back over 65 million euros ($76.78 million) out of a 103 million euro ($121.67 million) state aid package it received in 2012-13.

“With the European Commission’s decision, the company ceases to be a financially viable unit and will immediately lose its license,” Georgiades told reporters.

The ministers said the government will cover the estimated cost of 6-7 million euros of Cyprus Airways ticket holders who either wish to be reimbursed or make alternative travel arrangements.

Demetriades said some 70 airlines fly to Cyprus, which received a multibillion euro international rescue nearly two years ago, and that the national carrier’s demise won’t diminish the east Mediterranean island’s air links abroad.

He said plans are under way to set up a new company with private backing that will bear the Cyprus Airways name and logo.

Several dozen airline staff milled outside the company’s Nicosia offices awaiting word of what will happen to them as Georgiades said they will receive salaries and pension benefits that they’re entitled to.

The company, founded in 1947, struggled due to years of graft and mismanagement, and hemorrhaged money as it could no longer compete with new low-cost airlines that grabbed huge chunks of its business.

Authorities tried to salvage the bloated airline through several restructuring plans that halved staff to around 500 people and shrunk the fleet to six planes. But the last straw came by way of the European Commission’s ruling.

Airline union officials had accused the government of allowing the company to collapse, but Georgiades said that became inevitable when the previous government granted the aid.

Copyright (2015) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article was written by Menelaos Hadjicostis from The Associated Press and was legally licensed through the NewsCred publisher network.

Photo Credit: A Cyprus airways aircraft lands on the runway after it arrived from Athens, Greece, at Larnaca international airport, Friday, Jan. 9, 2015. Petros Karadjias / AP Photo