Silverjet Rescue Bid Collapses, Business-class Airline Lays Off Employees

LONDON --

The proposed buyout of collapsed business-class airline Silverjet fell apart on Friday and its 420 employees were formally fired, the administrator said.

Irish-based Kingplace Ltd. announced earlier this week that it had provisionally agreed to take over Silverjet, which suspended operations two weeks ago after running out of money.

But Nigel Atkinson and Mark Fry of Begbies Traynor, joint administrators for Silverjet, said Friday that Kingplace was no longer in a position to proceed with a deal.

"We now understand that, as a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern," the administrators said. Kingplace is managed by Geneva-based management company Heritage Cie SA.

"As a consequence, we have today had to make the entire work force formally redundant, in line with our legal obligations as administrator."

Silverjet employed 370 pilots and cabin crew and 50 administrative staff.

"We are extremely disappointed to have had to make these redundancies, which we had been working hard to prevent," the administrators said.

"We continue to negotiate the sale of Silverjet's assets for the benefit of the company's creditors and will provide an update as soon as we are able."

Silverjet suspended its service from its base at Luton Airport north of London to Newark airport in New Jersey in the United States and to Dubai, United Arab Emirates, on May 30.

The company reached a crisis when it failed to receive funding agreed under a deal with Viceroy Holdings LLC, an international luxury development fund based in the United Arab Emirates and the United States.

Silverjet, which had never turned a profit since it began operating in 2006, was the last business-class only airline flying between London and New York after the collapse of U.S. peers MAXjet Airways Inc. and EOS.