FreshAer, the UK-based airline that regulators warned was illegally selling flight tickets in the Republic, yesterday took the first step in applying for its Irish airline and tour operator licences.

FreshAer yesterday delivered a letter to the Commission for Aviation Regulation (CAR) seeking to apply for both sets of licences. It also collected the necessary forms and paperwork to make the applications.

FreshAer had been selling tickets via a website and phone line for flights from Dublin to the UK and Spain. The service is due to begin on October 1st.

Last week, the CAR said that as FreshAer was selling tickets for flights that would be operated by another carrier, it was effectively a tour operator.

The commission pointed out that FreshAer was not licensed to do this and was thus acting illegally. It warned that consumers who booked the flights would not have any protection under Irish law.

But the company argued that as it was negotiating with an Iceland Air subsidiary to provide the service, it was covered by that airline's licences and was outside the Republic's jurisdiction.

Following its request for the licences yesterday, FreshAer issued a statement saying that as far as it was concerned, "the regulatory issues have been agreed". It said that the deputy aviation commissioner, Mr Cathal Guiomard, told the company it had resolved all issues.

However, Mr Guiomard told The Irish Times he had not made this statement. "What has happened is that both sides have agreed a path for resolving all the issues. That path involves them applying for the licences," he said.

"We have a letter from them seeking the licence, so they would seem to have recognised this fact. They fully understand that the issue will not be finalised until they have the necessary licences."

Mr Guiomard added that consumers who booked flights with FreshAer before it received its tour operator's licence would still not have protection.