I wish to express my own regret and that of the Minister for Transport, Deputy Brennan, at the difficulties that Jetmagic is experiencing, and our concern both for the passengers and the staff of the airline.
Jetmagic is a Cork Airport based regional airline, which began operations in April 2003. The airline has been operating from Cork to a wide range of destinations in the UK and Europe and has 100 staff all based in Cork.
The airline announced earlier today that it is suspending operations on the recommendation of its board of directors. An extraordinary general meeting of shareholders will take place within the next week or so, to decide whether the company should be wound up. The airline has not actually closed as of yet, and if further financial backing can be found, it may be able to get back on its feet. The company has cited a lower than expected passenger demand, especially in business travel, as being the main reason for its cessation of operations. Competition from other carriers on some of its routes is also cited as impacting on the company's business forecast for 2004.
The airline has said that it has approximately 400 passengers who cannot now return to Ireland on Jetmagic flights. The airline has put a helpline in place, and any stranded passengers who call the number will be given details of alternative flights that they can arrange to get them home, although the airline is not in a position to fund those flights. Jetmagic is contacting airlines at airports it serves and is asking those airlines to help in getting people home.
Passengers who have already booked and paid for flights will not be able to travel outwards. The airline is recommending that any passengers who have paid for tickets with credit cards should contact their credit card company for a refund and that any passengers with travel insurance should contact their insurance company. For any passengers who have not paid by credit card and who do not have insurance, Jetmagic has provided an address to which claims for refunds should be sent.
Aer Lingus has offered that any Jetmagic passengers stranded abroad at any airport served by Aer Lingus, will be brought home by them for €50 per passenger, plus taxes. Passengers who are not at an airport served by Aer Lingus, but are able to make their way to such an airport, can avail of the same offer.
European airlines operate under a package of European law, known as the "third air package", dating from 1992. Under this legislation, airlines are free to commence operations as long as they meet economic and safety criteria and to compete on any routes they wish without recourse to any authorities for approval. Governments are not permitted to subsidise or assist any airline company.
In Ireland, economic regulation of the airline is carried out by the Commission for Aviation Regulation and safety regulation by the Irish Aviation Authority. Jetmagic commenced operations in April 2003, having obtained approval from both the Commission for Aviation Regulation and the Irish Aviation Authority. The Commission for Aviation Regulation became aware towards the end of last year that Jetmagic was facing financial difficulties. The Commission for Aviation Regulation contacted the company regarding concerns it had about the financial situation and asked the company to improve its balance sheet position. Jetmagic recently confirmed to the Commission for Aviation Regulation that it had received additional investment from some of its shareholders. It is now clear that these additional funds were not sufficient for the ongoing viability of the company.
The Deputy also raises the question of a review of the licensing of airlines. As it happens, the European Commission is currently carrying out a review of the third aviation package to see if the 1992 legislation requires updating. However, I am satisfied that the unfortunate collapse of Jetmagic is not due to any deficiency in the present licensing arrangements.