JetGreen fails as investors pull out over poor seat sales

Fledgling air tour operator JetGreen was grounded yesterday after shareholders decided not to continue funding its operations because of poor seat sales.

JetGreen stopped trading yesterday after just eight days and 16 flights, leaving several hundred Irish people stranded in Spain. It was the second Irish carrier to fail this year.

The Irish Times understands that its shareholders, including British businessman Mr Colin Gervaise Brazier, decided not to put any more money into the project because it was not generating enough revenue from seat sales.

JetGreen was selling flights on two routes - Dublin-Malaga and Dublin-Alicante. Seat sales to Alicante were particularly poor.

The company had received enough funding from its backers to begin operations with further tranches due subsequently.

But at a meeting yesterday shareholders decided they would not put further cash into the business.

According to a statement, shareholders are set to hold an extraordinary general meeting (e.g.m.) to wind up the company. Sources said last night that the backers could have lost around €2 million.

It is understood that the company will not leave large amounts of debts as it paid for most services up front.

Mr Gervaise Brazier, the lead investor, is based in Guernsey in the Channel Islands. He refused to comment when The Irish Times contacted him yesterday. Other backers included former CityJet executive, Mr Pearse Gilroy, and aviation professsional Mr Erig Conway.

Both Mr Conway and Mr Gervaise Brazier were last year involved with another start-up, UK company Freshaer, which failed to get off the ground after selling €250,000 worth of flights from Dublin to Spain. That money was eventually refunded through the consumers' credit card companies.

JetGreen said last week that it had sold 40,000 flights over the internet.

The company was classed as a tour operator, not an airline, as it did not have the necessary licence from the Irish Aviation Authority (IAA).

Iceland Air subsidiary, Luftleidir, a licensed carrier, operated the flights on its behalf. It was using just one craft.

That aircraft was still in Dublin Airport last night, but will be returned to Iceland.

The collapse follows the failure of Cork-based Jetmagic, an unrelated company, which stopped trading at the end of January.

It left debts of €3.5 million and passengers stranded in both Ireland and Spain. Investors lost €11 million on that project.

Last night, Fine Gael transport spokesman Mr Denis Naghten called on the Minister for Transport, Mr Brennan, to review the tour operator bonding arrangements.

The Irish Travel Agents' Association (ITAA) expressed similar concerns, and said that its representatives had already raised the issue with the Minister.