Up to 100 jobs at Skynet Airlines are in the balance after the loss-making carrier announced it was suspending flights because a dispute with a leasing company has left it without any aircraft. Edward Power reports.

Skynet, based at Shannon Airport, has stopped taking bookings and is offering refunds to those due to fly with it.

Executives, meanwhile, are negotiating with the US leasing company that grounded its two Boeing 737s in a dispute over payments.

The airline is bullish over its prospects for survival but sources admit the outlook could become bleak should flights remain suspected for a protracted period.

Skynet, which posted €4.5 million pre-tax losses for 2002, is also believed to owe around €200,000 to Aer Rianta, although a spokesman insisted this was not unusual for a small airline.

The row blew up late last week when the leasing company grounded one of the aircraft at Shannon.

Plans to source another jet never materialised and, with differences between the two parties deepening, the US firm grounded the second plane. With attempts to repair relations between the two parties continuing last night, Skynet was adamant it could shortly resume flying.

The 100 employees have been briefed on developments and there are no plans for protective notice, a spokesman said.

"Management believe they have a very promising company and are determined to get over this difficulty," he said. "The workers have been kept fully abreast of what is happening. As far as possible, they are going about their normal duties."

Established two years ago, Skynet operated six days a week between Shannon, Amsterdam and Moscow but it recently suspended the Moscow route due to poor passenger numbers.