All 420 workers at Silverjet, the troubled business-class airline, lost their jobs yesterday after an attempt to get the airline flying again collapsed.

A rescue deal for the airline had been suggested this week by Kingplace, an Irish shell company managed by Heritage, a Swiss investment group. However, talks broke down yesterday because of problems in raising sufficient cash to satisfy the Civil Aviation Authority (CAA), the regulator. It is understood that the CAA required Kingplace to show it could provide more than £25 million of funding to the airline over the next six months.

Negotiations over the leases of the aircraft were also thought to be behind the collapse of the rescue deal.

Mark Fry, the airline's joint administrator, said: “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 ... we have had to make the entire workforce formally redundant, in line with our legal obligations as administrator.” Mr Fry confirmed that 420 jobs would be lost.

Mr Fry said he would continue to negotiate the sale of Silverjet's assets to try to repay the company's creditors.

The administrators were legally obliged to make redundancies under rules that stipulate jobs must go unless a buyer is found within two weeks of a company entering administration.

Mr Fry said that there were still other parties interested in buying the airline, although it was unlikely that a successful sale would be completed. “There's a very short window of opportunity but, as every day goes by, it gets more difficult,” he said.

Silverjet, which flew from Luton to New York and Dubai, is likely to go into liquidation, with a few assets, such as contracts on aircraft and departure lounge physical assets attracting some interest. The brand may also have some value.

However, any proceeds from these sales will make no difference to creditors or shareholders.

Kingplace had hoped to have Silverjet flying again within weeks and retain its staff.

Silverjet's shares were suspended on May 23. A week later it ceased operations and was put into administration.

The airline ran into difficulties as soaring fuel costs coincided with a loss of confidence that led to a sharp decrease in bookings. The company also struggled to attract customers from larger rivals.

The carrier, along with Maxjet and Eos, its rivals, was founded as an attempt to tap into the rapidly growing business travel market. However, the start-up carriers struggled to match the frequency of flights offered by larger rivals and other perks, such as air miles. Eos and Maxjet both filed for bankruptcy protection this year.

Silverjet was thought to be losing about £1 million a month last year.

No silver lining

— Silverjet was founded in 2006 by Lawrence Hunt, a member of the Foyles bookshop family, and chief executive of the airline

— The inaugural flight took place on January 25, 2007, from London Luton to New York

— A Luton-New York round trip cost Silverjet more than £44,000 in May, up from £28,600 in November 2007, according to Daniel Stewart, the investment bank

— Ken Livingstone, the former Mayor of London, was banned by Silverjet in January this year after he said his flight to New York with the carrier was “the worst of my life”

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