Johannesburg - Airline 1time Holdings has filed for business rescue, according to a report on Wednesday.

The airline's board said it required business rescue because it was "financially distressed", Business Day reported.

The firm had about R320 million in short-term debt and had been in negotiations with creditors since March.

The low-cost airline, which was in the news this week following a second engine failure on one of its planes, would continue with its scheduled services, according to the report.

Earlier this year, another low-cost airline, Velvet Sky, went into liquidation after failing to convince a court that it was a candidate for business rescue.

According to Eyewitness News the company may have to lay off some staff as it looks to restructure operations.

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