BVI Airways (BVI, Beef Island) - the Caribbean airline which was due to start scheduled passenger services between Beef Island and Miami Int'l this week - has laid off all its staff due to a cash shortage brought on by regulatory delays.

"BVI Airways regretfully announces that it is immediately laying off its entire flight crew (pilots and flight attendants) as a result of ongoing delays," the airline said in a statement widely quoted in British Virgin media. "Hopefully, this will be a very short-term situation as we continue to work through remaining issues with the Government and will be able to commence flights shortly."

The private airline, which has also received around USD7 million in government funds, has said that pre-operating costs have depleted its cash reserves.

"The regulatory process took much longer than all parties expected, and has put a significant strain on the company's finances," BVI Airways' statement said.

In an earlier statement, the airline said that the government's announcement of a redevelopment program at the airport had hampered its ability to raise funds, as a longer runway would encourage bigger carriers to enter the market, ending BVI's monopoly.

"The government's ill-timed announcement of the contract award to lengthen the runway at Beef Island at an estimated cost of USD155 million made it much more difficult for BVI Airways to raise private funding," the airline said.

A similar opinion was aired by the Leader of the Opposition, Andrew Fahie, who said that the government's investment in BVI Airways made no sense if the airport would soon be able to attract larger US carriers.

Before this setback, BVI Airways had planned to offer a 2x weekly service between Beef Island and Miami Int'l on board ARJ-100 quadjets.