Customers may not be refunded by airline

JETMAGIC was entitled to take flight bookings right up to the moment it realised its financial position was unrecoverable, the Commission for Aviation Regulation said last night.

Many customers were furious that they had been allowed book flights when the company was aware of its precarious situation.

Rumours had been circulating within the airline industry for the last two weeks that the company was in danger of imminent collapse, one source said.

Despite this, Jetmagic continued to take online bookings until minutes before Wednesday night's meeting at which the shock announcement was made. Michael Bowen, from Ballincollig in Cork, used his laser card to book return flights for his family to Alicante on the internet at 8.30pm on Wednesday.

He could now face a €1,483 loss, as there is no guarantee Jetmagic will be able to refund customers who paid by cash, cheque or laser card. The Commission for Aviation Regulation last night would only say that Jetmagic was within its rights to keep accepting bookings until it realised it could no longer continue trading.

But a source close to the commission said: "It's possible for companies to trade out of such situations. There was no onus on them to stop taking bookings.

Jetmagic were entitled to attempt to trade their way out of trouble."

The company was only legally bound to stop taking bookings, he added, "as soon as it was clear it had to stop trading". Jetmagic could not say yesterday how many customers were affected as a result of the company's collapse.

"That information is not available at the moment," a spokeswoman for the company said.

Jetmagic said in a statement the company had not proved to be a viable operation and that expected passenger demand did not materialise, especially in terms of business travel.

The decision by competitors to introduce flights to some of Jetmagic's most successful destinations had also impacted on the company's business forecast for 2004, the company said. Jetmagic enjoyed high passenger loads on a number of routes particularly those to holiday destinations, including Alicante, Barcelona, Nice, Nantes and Milan.

But business routes to Brussels, London City, Edinburgh, Liverpool and Paris were "very disappointing" with only Belfast City achieving satisfactory levels.

The company was set up with a €10m investment last spring.

Chief executive Barry Perrott blamed the collapse on the company's failure to attract enough business customers.