420 Silverjet jobs axed

Swiss investor Kingplace had provisionally agreed to take over the Luton Airport-based carrier after it fell into administration a fortnight ago.

But administrator Begbies Traynor said that, due to "unusually complex negotiations" with third parties, Kingplace was "no longer in a position to acquire Silverjet as a going concern".

"As a consequence, we have had to make the entire workforce formally redundant, in line with our legal obligations as administrator," Begbies partner Mark Fry said.

The airline's 420 employees were made redundant, a spokesman for the administrator said, with Silverjet's assets now likely to be sold off to raise money for creditors.

Silverjet, which started in January last year and flew to New York and Dubai from London Luton, employed 370 pilots and cabin crew and 50 administration staff.

Mr Fry said: "We are extremely disappointed to have had to make these redundancies, which we had been working hard to prevent. We continue to negotiate the sale of Silverjet's assets for the benefit of the company's creditors and will provide an update as soon as we are able."

The airline grounded its flights a fortnight ago after a £2.5 million funding package from a Middle East investment group failed to materialise, wrecking travel plans for nearly 10,000 passengers.

Its collapse came after record oil prices and tighter credit conditions impacted on Silverjet's working capital and left it with limited reserves. Shares in the airline were suspended last month.

Kingplace, which is registered in Ireland and managed by Swiss management company Heritage, agreed to take over the airline for an undisclosed sum earlier this week. Director Ian Ilsely reportedly spoke of being "excited" at the prospect of acquiring Silverjet and resuming operations as quickly as possible.