Virgin Express Holdings has put its Shannon-based subsidiary, Virgin Express Ireland, up for sale as part of a rationalisation plan. Businesses in the region have reacted with dismay at the possibility of the low-cost airline closing in the new year if no purchaser is found. Virgin employs 220 people in the State, most of them based around Shannon. The loss-making company, in which Sir Richard Branson has a majority stake, stated that operations would be focused on Virgin Express Belgium from January 15th.

"This decision follows a strategic review, completed by the new management team, and will result in a refocusing of the business around profitable routes out of its Brussels hub," it stated.

An airline company and a business consortium interested in getting into the industry, have made approaches, Mr Yves Panneels, corporate communications manager, said. Mr Martin Hamrogue, chief executive of Virgin Express Ireland, said the Irish subsidiary was not profitable but he was confident it could have a future in Shannon where it operates flights to London Gatwick and Brussels. Staff were informed of the plan yesterday by the chairman, Mr David Hoare, but redundancy notices have not been issued. Among the Shannon operations are the European reservations centre, which employs 25 people.

The chief executive of Ryanair, Mr Michael O'Leary, said his company was not interested in buying the Irish operation, which includes seven leased Boeing 737s. He believed no sale would go through and the company would close. Mr Hamrogue said it had been difficult to give the company a focus because it was coexisting with Virgin Express Belgium. It set up the Irish operation two years ago.

Up to the end of November, the company carried 140,000 passengers this year on its twice-daily service to London Gatwick and 44,000 on the Brussels route.

Concern was expressed among the business community in the Shannon region at the announcement. Mr Brendan Woods, Limerick Chamber of Commerce chief executive, said the chamber received the news with deep dismay. "It is essential for the business community that the future of Virgin Express Ireland be given every possible help by Aer Rianta."

Mr Barry O'Shea, Aer Rianta general manager at Shannon, said the airline had made a significant contribution to Shannon since its establishment.