Kansas City, Mo ? Unable to find the new financing it needs, struggling Vanguard Airlines suspended operations Tuesday, saying it would lay off nearly all its employees and file for Chapter 11 bankruptcy organization.

The Kansas City-based discount carrier has never shown an annual profit in eight years of operation. A recorded announcement on its reservation line early Tuesday said all Tuesday and Wednesday flights had been canceled and all other flights scheduled after that have been suspended indefinitely.

“The company is seeking funds in order to resume operations,” the announcement said. “The company intends to file for protection under Charter 11 of the Federal Bankruptcy Code.”

By midmorning Tuesday, Vanguard’s gates at Kansas City International Airport were deserted except for media and security guards. A few Vanguard managers were there with flyers to explain the decision to any potential customers.

Bob Baker, of Belton, Texas, was scheduled to fly to Las Vegas Monday night with his son, Doug, of Olathe, Kan.

“Last night they just said they canceled the flight because of mechanical problems,” Baker said Tuesday. “Well, it was. They didn’t have any fuel.”

Baker had flown from Austin, Texas, to meet his son.

“It was my first flight on Vanguard and it looks like my last,” Baker said.

Vanguard’s video display was still running Tuesday morning, showing that departing flights were on time.

Another would-be passenger, Jeff Seume, of Kansas City, was scheduled to fly to Los Angeles on a flight that was canceled Monday night.

He said he was given a $100 voucher for a future flight on Vanguard.

“Now I’m stuck with a voucher that’s meaningless, as I’m sure many people are,” Seume said.

The Air Transportation Stabilization Board announced Tuesday it had rejected a request the federal government guarantee an $8 million loan for Vanguard. The board said the airline’s “proposal did not provide a reasonable assurance that Vanguard will be able to repay the loan.”

Sen. Jean Carnahan, D-Mo., said the ATSB should have approved the loan guarantee.

“I believe the Air Transportation Stabilization Act was intended to support all airlines – regardless of size – that were harmed by the events surrounding the Sept. 11 terrorist attacks,” Mrs. Carnahan said.

It wasn’t the first request Vanguard had made. The board decided May 28 not to guarantee $13.5 million of a $15 million loan Vanguard sought from a German bank.

On Monday night, calls to Vanguard headquarters were met by a recording saying all circuits were busy. The airline’s Web site had still been accepting reservations earlier in the evening, but by 11 p.m. the site was blank except for a link to another carrier, Frontier Airlines.

By early Tuesday, the Web site carried a new message: “I’m sorry our booking server is temporarily down! Sorry for the inconvenience!”

Scott Dickson, Vanguard’s chairman and CEO, told The Kansas City Star that the failure to secure the financing it needed was forcing the company to plan the Chapter 11 filing.

“This is a sad day for Vanguard, for its employees and for Kansas City,” Dickson said. “Today’s events hurt people. … We have done everything in our power to avoid today’s actions.”

Elizabeth Cattell, Vanguard’s vice president or marketing and advertising, said nearly 1,100 employees, including about 915 in Kansas City, will be terminated before the Chapter 11 filing. A skeleton crew of about 60 will stay in hopes that additional financing can be obtained.

Cattell said Vanguard had arranged ticket-holders to buy discounted tickets from Frontier and National airlines, and was talking to other carriers about similar arrangements.

By Tuesday morning, Frontier had a link on its Web site providing information for Vanguard customers. The Denver-based airline said it would waive advance purchase requirements and other restrictions on fares purchased by Vanguard ticket holders.

Ray Neidl, an independent airline analyst, said Vanguard probably doesn’t have the funding to stay open.

“It may be harder to restart, but they probably have no choice,” Neidl said.

Russell Widmar, Kansas City’s aviation director, said earlier a senior Vanguard executive had told him the company planned a bankruptcy filing. He said the company was planning a news conference at 1 p.m.

One of the startup carriers that proliferated nationwide in the 1990s, Vanguard has never had a profitable year since beginning operation in December 1994. Its last quarterly profit was in 1998.

With a fleet of six Boeing 737s and seven MD-80s, Vanguard has specialized in low fares. Its recent schedules listed 17 destinations: Atlanta, Austin, Buffalo/Niagara Falls, Chicago, Colorado Springs, Dallas/Fort Worth, Denver, Fort Lauderdale, Fla., Las Vegas, Los Angeles, Myrtle Beach, S.C., New Orleans, New York, Orlando, Fla., Pittsburgh, San Francisco and Seattle.

In a July 18 interview, Dickson told The Associated Press he thought Vanguard would be able to find funding to restructure its debt.

“Right now we’re seeing enough liquidity, potential liquidity coming back into the market from investment companies that that’s the avenue we’re marching down,” Dickson said.

He added, however, that “bankruptcy is not necessarily to be feared.”

“In the airline industry, more often than not you can keep right on flying through bankruptcy. I mean, most airlines do,” he said.