Airline run by 'baby Branson' faces claims of fraud

Published on Monday 15 March 2010 22:10

POLICE are investigating alleged fraud at an airline run by the "baby Branson", whose Edinburgh- Oxford flights were grounded a week after its launch.

Detectives from Thames Valley Police's economic crime unit have launched inquiries into the alleged non-payment of aircraft hire fees by Varsity Express, run by Martin Halstead, 23.

The airline, which began daily flights on 1 March, halted operations a week later, leaving passengers stranded in Edinburgh and some 500 advance bookings.

Humberside-based Links Air, which owns the single 18-seat aircraft used by Varsity Express, has said it is owed up to 20,000 in unpaid bills.

Owner Jon Ibbotson has said: "They have not paid bills and were in breach of contract – they failed to meet their obligations. I'm distraught with it all."

There have also been reports that pilots recruited by Varsity Express paid the airline up to 15,000 each to be trained.

A police spokeswoman said: "We have had two allegations of fraud against Varsity Express which we are investigating."

In 2006, at the age of 19, Mr Halstead launched Alpha One Airways, which flew between Edinburgh and the Isle of Man for just six weeks before collapsing.

He earned his nickname after being praised by Virgin Atlantic president Sir Richard Branson, who described him as being "as bright as a button".

The Varsity Express website has been shut down, with the airline stating it had "regrettably" announced the suspension of services.

It said: "The reason for this suspension is due to operational issues between Varsity Air Services Ltd and the airline and air operator certificate holder, who have been contracted to operate the Jetstream 31 type on our behalf and that was being used on the route."

Mr Halstead was not available for comment last night.