A new Air Italy Boeing 737 MAX 8 is pictured as Boeing Commercial Airplanes, Qatar Airways and Air Italy celebrate the delivery of their first 737 MAX in Everett, Washington on May 11, 2018. (Photo: AFP)

ROME, Feb. 14 (Xinhua) -- Air Italy, the regional carrier that once aspired to challenge Italy's flagship carrier Alitalia for dominance of the country's domestic air market, announced Friday that it would lay off all of its nearly 1,500 employees as a final step ahead of definitively ceasing operations.

Less than two years ago, competition from Air Italy was seen as a major factor in Alitalia's struggles to find a major buyer for its operations. Now, the 56-year-old company is sending out letters informing around 1,450 workers they no longer had a job, though media reports indicated that a few employees could be retained by Milan Malpensa Airport and Sardinia's Olbia Airport, the airline's two main hubs.

Air Italy was founded in 1963, and it went through several incarnations over the decades. But the company became prominent in 2018 when it merged with former parent company Meridiana and signed a partnership with Doha-based Qatar Airways. That year, the company announced plans to challenge Alitalia as Italy's main air carrier, an unwelcome development at a time when Alitalia was shopping itself around for potential buyers.

But the threat to Alitalia never materialized and earlier this year the struggling carrier began to look for a buyer itself. When no buyer emerged -- discount carrier Ryanair, once seen as a potential buyer for Alitalia, was the last company to declare it had no interest in taking over Air Italy -- the company began the process of liquidation that led to Friday's mass dismissals of personnel.

Air Italy flights sold through Feb. 25 will be honored through agreements with other airlines, Air Italy said. The company's property will be liquidated to pay off debt.