Business Jet operator folds after failed Mid East promotion

Barely a week after a major promotion to encourage Middle Eastern customers to purchase its Jet Cards or single-flight tickets for private business travel, luxury operator Jet Republic has folded.

Last week the company’s CEO Jonathan Breeze said he wasexpecting a surge in demand over the next three months from Middle-Eastern visitors heading to London to benefit from the relative weakness of the pound and summer sales. He said his company had already seen an increase in calls from people from the Middle-East looking to visit the UK during Ramadan.

But instead, this morning the company declared itself insolvent and suspended operations. A spokesperson at the Portuguese registered head office said that “...the aviation asset finance market has completely dried up making it much more difficult for potential clients to take out and obtain financing for fractional ownership of jets. We have therefore taken the decision to suspend our operations inPortugal until further notice."

The company was unable to say how many Middle Eastern customers had taken up the new offers, nor what would happen with any commitments made.

Launched in September 2008, Jet Republic made the largest European private jet order ever placed – $1.5 billion for 110 Bombardier Learjet 60 XR aircraft (25 of them as firm) in June 2008.

That order was cancelled by Bombardier this afternoon.

The Jet Republic spokesperson added “Our holding company is fully operational and will work closely with our shareholders to ensure that the interests of our existing clients, employees and suppliers are protected to the best of our ability.”

Jet Republic offered its clients four products, namely a discount on the purchase of a new Bombardier Learjet 60 XR aircraft for $13,500,000 compared to a list price of $14,600,000, fractional ownership, Jet Card Membership and Private Jet Charter.

Although based in Portugal – close to rival Netjets – it was pushing for business across the Middle East and North Africa as well asEurope.

Bombardier said today that it has terminated its firm and conditional order purchase agreement with Jet Republic in respect of all aircraft.

The Canadian manufacturer in a statement said it remains committed to the Learjet 60 XR program and production of the aircraft at its Learjet facility in Wichita, Kansas, continues as planned.