EUjet, the Kent-based airline that took off with such high hopes last September, has been grounded after running out of cash.

Scores of passengers who turned up at Kent International Airport on Tuesday were turned away. Around 5,000 are thought to be stranded at airports overseas.

EasyJet has offered to "rescue" stranded passengers for £25 to bring them home to the UK but there have been some reports that the company is charging more than that amount.

About 500 airline and airport jobs are likely to be lost after the budget airline and its parent company PlaneStation, which also owns Kent International Airport at Manston, both went into administration.

At the end of a day of drama that began with services running to schedule, bosses announced that bankers had refused to extend credit facilities and there was no alternative but to call in an administrator.

In June, PlaneStation said it was selling property assets to fund the airline, including a 75 per cent stake in Kent International Business Park, close to the airport at Manston.

But bankers withdrew their support for the group after a delay in disposing of the property.

This meant that PlaneStation could no longer fund EUjet. Airline chiefs then spoke to other investors to see whether they could find a way to keep it in the air.

But PlaneStation’s financial situation was so serious that it could no longer keep Kent International Airport operational and would seek voluntary administration for PlaneStation Group Plc and KIA.

EUjet chiefs were unable to attract an investor without guaranteed use of the airport and could not therefore continue with the business.

In a statement, EUjet chief executive P J McGoldrick said: "Therefore, it is with regret that I must advise you that EUjet has had no alternative but with immediate effect to suspend all airline operations and appoint an administrator."

He added that the administrator in Ireland would continue discussions with possible buyers.

"With respect to our customers, you should be aware that our policy of not drawing down on funds until passengers have flown means that we have all their money in escrow and passengers will be able to claim a credit from their credit card company.

"All passengers will be contacted by the commercial team about the cancellation of their flights.

"As I am sure you can appreciate, marketing a new airline operation from Kent International Airport, which had no recent history of passengers operations has been difficult.

"Unfortunately, these circumstances combined with the fact that we have an aircraft out-of-service for the whole summer, has meant that we have not hit targets set.

"Whilst, EUjet’s operations from Shannon have exceeded all expectations, the under-performance in Kent combined with reduced aircraft availability, a high fuel price, the failure of the group to develop the cargo business, difficulties encountered with group property transactions and the unexpected withdrawal of banker support resulted in an irresolvable conclusion for the Group."

He told staff: "I know this is terrible news for you all, especially considering the time, effort and passion that all of you have shown in building the business. However, I have one final request to make of you all. Namely, that you will, like I will, leave with your heads held high about what we achieved with EUjet.

Since September 1, EUjet has taken around 450,000 bookings and recorded the best on-time record of any airport in the UK.

He said EUjet was a memorable airline and he was "proud and honoured to have worked with such a fantastic team".

Passengers with bookings should contact EUjet customer services helpline on 0870 4141414. EasyJet can be contacted about its "rescue" offer from outside the UK on 00 44 870 600 000.

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