Spanair, Spain’s second largest airline, is to cut about a quarter of its workforce and its fleet in an attempt to combat high fuel prices, fierce competition and a sharp downturn in its domestic market.

The loss-making carrier, which is owned by the Scandinavian group SAS, said on Wednesday it would shed 900 staff jobs as part of a “viability plan”. The announcement comes a month after SAS abandoned a year-long search for a buyer for its Spanish subsidiary, which last year incurred an operating loss, before one-off items, of about €30m.