THE future of the airline company EUjet was in the balance today after flights were suspended.

P J McGoldrick, chief executive of the Kent-based low-cost airline, sent an email at 10.35am to staff instructing them to suspend flights "temporarily" until the situation was clarified by a statement promised for later in the day.

Events moved rapidly as bosses of PlaneStation, the owner of EUjet and Kent International Airport, resumed talks with the banks in a bid to extend credit facilties.

A statement to customers on EUjet's website said: "Please be advised that today’s flights to Dublin, Edinburgh, Newcastle & Belfast have been cancelled. EUjet apologise for the inconvenience caused and will contact passengers directly. Normal operations will resume shortly."

Before Mr McGoldrick's dramatic email, an airline spokesman had said that it was "business as usual" with flights running to schedule.

He had confirmed that bookings were still being taken and customers were fully protected from financial loss if their flight did not take off.

He said: "To be honest, it’s too early at this stage to be speculative about the long term viability of the airline.

"It’s business as usual, we are carrying passengers and meetings are going on at a high level to determine the long-term future."

But after the announcement, passengers turning up for flights were left wondering whether they would ever get away to their destination.

The decision to halt flights came the day after trading in PlaneStation shares was suspended on Monday after the Bank of Scotland said it was no longer able to support the company with additional facilities.

The Financial Times reported that the debt might be as high as £25m.

Despite carrying 300,000 passengers since its launch on September 1, 2004, PlaneStation revealed in June that passenger numbers would be below expectations and said more cash would be needed.

Earlier this year, it raised £28m from investors to pump into the airline. But the rising cost of fuel and fewer passengers than expected have meant that cash needs are "greater than originally planned".

The directors have said that a shortfall in cash would be funded by asset sales, including disposal of 75 per cent of its interest in Kent International Business Park close to the airport.

They said that PlaneStation bankers had been kept fully informed of the group’s position and the need for ongoing support and an extension of facilities while the disposal was completed.

They had expected that support to be forthcoming.

However, in a statement from the London Stock Exchange, they said "discussions with the company’s bank over the last 48 hours have not been positive and the company has been informed this morning that the bank is no longer able to support the company with additional facilities".

It added: "The company has therefore requested a suspension of trading in its securities pending clarification of its financial position. A further announcement will be made in due course."

EUjet, the county's first scheduled airline, has huge significance for Kent. It has put the county on the aviation map, a fact that persuaded Kent County Council to invest more than £100,00 in the venture.

But airline experts have worried that its main market in Kent and South East London, coupled with the distance to the airport, even though it is probably the cheapest and most convenient in the South East, would affect long-term viability.

The situation is a blow to Kent County Council which invested around £100,000 in the airline. The decision to pump money into a private venture was made to underline the county's determination to establish aviation links with the outside world.

A scheduled airline operating out of Manston has been seen as an important sign of economic regeneration. Many businesses have become used to using EUjet flights to UK and overseas destinations. Holidaymakers have enjoyed services on their doorstep.

Cllr Alex King, KCC Cabinet member for regeneration, said he was disappointed by the news but hoped for the best.

"EUjet has proved that you can run a successful budget airline out of Manston even though the numbers have not met the optimistic hopes and we will be pushing for Manston to continue to play an important part both as a passenger and cargo airport," he added.

Related article:

Passengers in anxious wait at terminal