The government of the British Virgin Islands has issued a Notification of Breach of Contract to stalled local start-up carrier BVI Airways (BVI, Beef Island).

According to BVI Platinum News, the Caribbean islands' Premier and Minister of Finance, D. Orlando Smith, told a parliamentary Q&A session last week that the letter was dispatched to BVI Airways on October 1 of this year.

“Whatever next steps happen will take place on the advice of the attorney general,” he said.

Earlier this year, Smith's government granted a loan of around USD7 million to BVI Airways to assist in the launch of scheduled passenger flights to the United States. Under the terms of the loan, BVI Airways was to have repaid government from operating profits generated during the first three years of commercial service.

However, despite completing certification, the carrier laid off all staff and suspended all operations in July citing a "regulatory process" that, because of its drawn-out nature, had put a "significant strain on the company's finances". It also blamed government's "ill-timed announcement" concerning a contract to lengthen Beef Island's runway, as having made it much more difficult for it to raise private funding.

BVI Airways had planned to run 4x weekly flights from Beef Island to each of Miami Int'l and San Juan Luis Muñoz Marin using ARJ-100 equipment.

US Department of Transportation (DOT) documents indicate BVI Airways is owned by one Pauline Jones (31%), Bradley Goggin (20%), and US-based Colchester Aviation LLC with 49%.