Thousands of Silverjet customers have been stranded or have lost money after the business class-only airline today admitted it no longer had the cash to continue flying, suspended operations and appointed an administrator.

The airline, which has only been in operation since last year, is the latest to fall victim to soaring jet fuel prices.

"It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect," it said.

"The board does not believe that there is likely to be any value realised for shareholders", it added later when it announced the appointment of the administrator.

The last flight took off at 7.30 this morning from Luton on its way to Dubai, as the Civil Aviation Authority estimated that 7,000 British customers and 2,500 non-UK customers were affected by the airline collapse.

According to the industry regulator, its ATOL protection scheme does not cover passengers who booked flights direct with Silverjet.

The CAA is advising UK customers who are due to fly back to London from New York or Dubai to make alternative arrangements with other airlines. The regulator said customers who had booked flights with a credit card should be able to recover money from their credit card company or their travel agent.

Customers who paid by debit or charge card should contact their card company for advice, or check any travel insurance policy taken out about any airline insolvency cover that may be provided.

Silverjet passengers who arrived at Luton Airport today said the airline had made no attempt to contact them. Grant Godwin, 39, said: “Twelve of us were supposed to be flying out to Dubai this evening for my 40th - disappointed is not the word.”

Another customer also due to be on the Dubai flight said he had heard nothing from Silverjet.

Dennis Jarvis, from London, said: “I heard on the radio this morning, so came straight down to sort this out. They won’t talk to me - I’m speaking to them behind glass.”

The doors to the Silverjet departure lounge were locked all morning, with only a sign taped to the door to inform passengers expecting to travel of the situation.

Silverjet's 350 employees were also in the dark about their own futures. Three lounge assistants arrived to collect their belongings.

One female employee, who did not wish to be named, said: “We got a phone call this morning, saying we had to come and collect our stuff. We don’t know if we’re even getting paid. What next? I don’t know - the pub?”

Last night, Silverjet said that its would-be Abu Dhabi investor Viceroy had failed to provide it with the $5 million cash loan it had promised under a rescue deal and that it was left talking to just one potential rescue investor.

This morning it added: "Silverjet continues to be in discussions with investors interested in supporting the business, however, it has yet to conclude such discussions to its satisfaction."

The advance was required as a matter of urgency since its working capital reserves were limited. It is understood it did not have enough cash to pay for the fuel for any more flights.

Lawrence Hunt, former chief executive of Silverjet, said this afternoon: “It is with deep sadness that I make this announcement today. The Silverjet team has worked exceptionally hard to try and turn this situation around, however with the time available, we were unable to secure the funding required to continue our operations.”

A week ago Silverjet's shares were suspended when the airline revealed that Viceroy was not handing over the cash which it needed urgently to keep flying. At the time the airline confirmed that it remained in talks with one party that was interested in investing in the company.

The Luton-based carrier, which offered business-class flights to New York and Dubai for about one third of the price of a British Airways ticket, said last year that it was losing about £1 million a month. This figure is rumoured to have doubled in recent months. Silverjet's share price fell from 120p at flotation to 13½p before its stock was suspended.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive