The company behind failed Stobart Air said it decided to pull the plug after Manx firm Ettyl, which was a potential buyer, lost its funding to take over the business.

Esken said it had become clear that Douglas-based Ettyl would be unable to conclude a deal ’on the original terms or to obtain an alternative funding package within the required timescale’ so it pulled out of the transaction.

The business told Stobart Air’s board that it would pull support, a move that has disrupted the travel plans of many people from the UK and Ireland.

The board of Stobart Air terminated its franchise agreement with Aer Lingus which had helped operate flights to and from Dublin, Belfast, Manchester, Birmingham and Leeds among others.

Stobart Air will cease trading and is taking steps to appoint a liquidator. Around 480 jobs are thought to be at risk.

A deal had been struck in April to sell Stobart Air and Carlisle Lake District to Ettyl for an initial outlay of £2.

A spokesman for Ettyl, based in Queen Victoria House, Victoria Street, Douglas said: ’In response to the decision of the board of Stobart Air to appoint a liquidator to the business and to cease operations, our thoughts are with all the staff and passengers affected.

’Ettyl Limited can confirm that it has received termination notices from Esken in respect of the proposed transactions for Stobart Air and Carlisle Lake District Airport.’

On Twitter at the weekend Ettyl chief executive Jason Scales said: ’The past few weeks have been some of the most challenging I have ever experienced.

’After issues were flagged to do with an Ettyl funder, we fought hard to conclude a deal that rescued StobartAir.

’My thoughts are with every amazing Stobart Air employee today.

’I’m sorry. J.’

Earlier this month Ettyl said it alerted Isle of Man police to potential irregularities in paperwork relating to a third-party funder.

And the business said it had been in discussions with potential alternative providers of finance.

Esken executive chairman David Shearer said: ’It is disappointing for all stakeholders that we have been unable to conclude the sale of Stobart Air as a going concern despite the tireless efforts of my executive colleagues, the management team of the airline and the team of advisers who have supported them.

’I am acutely aware of the impact this will have on the staff, customers and the businesses associated with the airline but the continuing impact of the pandemic in terms of lockdown and limited travel has prevented us from achieving a better outcome.’

Isle of Man Newspapers had earlier last week sought a comment from Aer Lingus on when flights might be resumed between the island and Dublin.

On Friday a spokesman told us: ’We will recommence services to and from the Republic of Ireland in line with passenger demand, as and when travel restrictions in the Republic of Ireland permit unrestricted travel within the Common Travel Area.’

But Aer Lingus then issued a bombshell statement on Saturday: ’Late on the evening of June 11, Stobart Air notified Aer Lingus that it was terminating its franchise agreement with Aer Lingus with immediate effect. As a result, all Aer Lingus Regional flights operated by Stobart Air are cancelled.’

Stobart Air referred to the continuing impact of the pandemic which has resulted in almost no flying since March 2020.

Ettyl’s chief executive Mr Scales, who is in his 20s, has an office at the ’Hubb’, a serviced office business and ’incubator’ that facilitates investments.