Troubled Westward Airways is out of business in New Mexico and Nebraska, company officials said Wednesday.

The board of the Scottsbluff, Neb.-based airline decided to cease operations after a conference call with New Mexico, federal, and other officials, said Eldon Anthony, Westward's president.

Company chairman Paul Reed said there was no chance that Westward would restart its operations in Nebraska. About two weeks ago Westward stopped service to Alamogordo and three other New Mexico cities, saying it couldn't continue to sustain losses born of few passengers and insufficient subsidies.

"It's just a huge huge loser," Reed said of the New Mexico route

Participants on the call, to discuss the airline resuming New Mexico service, did not like the company's proposal of reducing Nebraska's operations rather than cease operating completely, Reed said.

"As long as we're in that contract, we're not allowed to fly anywhere else," Reed said, noting the company would be subject to penalties if it were to forgo its federally subsidized route in New Mexico and operate elsewhere.

Anthony said he thought it was unfair to end an established route because the company's obligations in New Mexico were not achievable.

"It's a sad day. It's over and nobody wins," Anthony told the Scottsbluff Star-Herald.

Tom Baca, aviation director for New Mexico, said the U.S. Department of Transportation suspended Westward's air carrier certificate because Westward had stopped federally subsidized service to Alamogordo, N.M.

But the Transportation Department was going to require that Westward prove its fitness to continue, a review that would include financial strength.

"It's too bad, too," Baca said. "Ridership was climbing. They had nice planes."

Anthony did not return calls placed by The Associated Press at his office in Scottsbluff on Wednesday seeking comment.

He told the Scottsbluff Star-Herald it would be up to the Department of Transportation to make the final decision on the New Mexico route.

Anthony said he expected the company's trio of leased single-engine Pilatus PC-12s to be working elsewhere in a week. In a letter sent to federal officials, Anthony said the plane's owners would terminate the leases if Westward were obligated to operate the New Mexico route.

He said the company had expected to make $210,000 a month on the New Mexico routes but only brought in about $80,000. That shortfall caused the airline's failure, he said.

Nebraska's two U.S. senators met with representatives from the Transporation Department Wednesday morning. A message left at the Transportation Department Wednesday was not immediately returned.

The airline could start again because certificates are valid for a year, Anthony said, although it would take time to get the airline going again.

The announcement was bad news for western Nebraska, said Starr Lehl, mayor of Gering.

"We felt like it was such an important link between the west and east, to our state capital, to Omaha," said Lehl, who added residents were looking forward to planned expansion to Kansas City and beyond.

Westward started up in May 2004, offering in Nebraska what it called the "River Run": Scottsbluff to North Platte to Lincoln to Omaha each weekday, two flights a day, each way.

Airport records say it's been averaging between four and five passengers a day per flight out of Scottsbluff on its nine-passenger, single turboprop aircraft.

In March, Westward's management team secured subsidies of $20,000 a month each for five months from Scottsbluff and Gering.

Reed had told the Scottsbluff and Gering city councils that the only way the airline could continue was if there were an infusion of $1 million in local capital.

He has said that flaws in fuel calculations and poor marketing led to Westward's financial trouble.

In April this year Westward announced service to Las Cruces, Gallup and Albuquerque, N.M., and Phoenix, Ariz.

Last month Westward stopped service to North Platte, citing a lack of passengers.

Also last month, Grand Island and Hall County officials decided to pursue a $500,000 local and federal subsidy for Westward to provide flights from the Central Nebraska Regional Airport in Grand Island to Kansas City, Mo., and Lincoln.

Westward is a private corporation owned by more than 100 investors and stockholders.