The Cork based regional airline, Jetmagic, announced the suspension of its operations on Wednesday, 28 January 2004. The company has not yet had a meeting of shareholders and until that meeting happens a final decision on the company cannot be taken. A spokesperson for the airline has informed my Department that all of the airline's passengers have returned home, and that where advanced credit card bookings were made, that those moneys are being refunded.
Two of the airline's three aircraft have been repossessed by the Swiss leasing company which provided them, with the third aircraft due to be returned to the leasing company following maintenance to its engine. One aircraft had been impounded by Aer Rianta, but Aer Rianta and the Swiss leasing company reached a mutually satisfactory settlement.
The airline's own view of why it collapsed is that expected passenger demand did not materialise, especially in terms of business travel and the company's projections regarding traffic to London in particular were not realised. The company also cited competition on some of its routes as impacting on their business forecast for 2004.
The Commission for Aviation Regulation became aware towards the end of last year that Jetmagic was facing financial difficulties. The CAR contacted the company regarding concerns it had about the financial situation and asked the company to improve its balance sheet position. Jetmagic subsequently confirmed to the CAR that it had received additional investment from some of its shareholders. It is now clear that those additional funds were not sufficient for the ongoing viability of the company.
It is regrettable that this new Irish airline did not succeed. Its efforts illustrate the competitive nature of the airline business today. That competition, of course, has been very positive for the growth and cost of Irish aviation in recent years. Jetmagic's experiences do not necessarily mean that other start-up airlines, Irish or otherwise, will not succeed. An airline's choice of market, services and business strategy,inter alia, will determine its success.