The collapse of the Jetmagic airline was not due to any deficiency in the present licensing arrangements, the Minister of State for Agriculture, Mr Noel Treacy, told the Dáil.
He said that in Ireland economic regulation of the airline was carried out by the Commission for Aviation Regulation, while safety regulation was the responsibility of the Irish Aviation Authority.
Jetmagic had commenced operations in April 2003, having obtained approval from both the commission and the authority.
"The Commission for Aviation Regulation became aware towards the end of last year that Jetmagic was facing financial difficulties. The commission contacted the company regarding concerns it had about the financial situation and asked the company to improve their balance-sheet position," Mr Treacy said.
"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 no sufficient for the ongoing viability of the company."
The Minister was replying, on behalf of the Minister for Transport, Mr Brennan, to the Labour spokeswoman on transport, Ms Roisin Shortall.
She said the priority was the plight of the 400 passengers abandoned at various airports.
She accused Mr Treacy of seeming to "wash his hands of any responsibility" for those people.
Denying the accusation, Mr Treacy said: "There is no such thing as washing our hands. We are bound by certain national and international legalities on this issue.
"The Department taks a very serious regard of this matter and has been in contact with the company since the latter part of last year."
