Silverjet to launch new routes after cash injection

[Pieter C. 5]

Silverjet To Launch New Routes After Cash Injection

 

May 1, 2008

Business class only airline Silverjet is planning new routes to India, South Africa and the West Coast of the United States following a life-saving cash injection, its Chief Executive said on Wednesday.

 

CEO Lawrence Hunt said the airline, which currently flies to New York and Dubai from its base in Luton, north of London, said he hoped the expansion would be in place by the summer.

 

"That's what the USD$100 million (cash injection) is partly for... We need regulatory approval, which we are waiting on," he said in a telephone interview.

 

Silverjet, the last remaining business class-only airline following the recent collapses of MAXjet and Eos, said earlier it had raised USD$25 million in debt and equity from a Middle East investor, with a potential USD$75 million to follow.

 

Hunt would not name the investor, although he said it was an investment fund rather than an individual. He added that he hoped the cash would help restore sentiment in the firm following widespread speculation it would follow its rivals into bankruptcy.

 

"The Eos collapse last week has affected sentiment among travel agents and customers. MAXjet went bust, Eos went bust, so people thought Silverjet would go bust," he said.

 

He added that the cash should be enough to see the company through to profitability, but he would not say when that would be due in part to the scale of the expansion plans and the high oil price.

 

Silverjet will issue its latest passenger numbers next week. Hunt said the group had taken "loads" of passengers who were previously planning to fly with Eos.

 

"This move provides timely reassurance as to Silverjet's financial health and leaves it well placed to exploit the gaps in the market left by the demise of Eos and Maxjet... a market that now belongs to Silverjet," said Douglas McNeill, transport analyst at Blue Oar Securities.

 

(Reuters)

 

[Mushrif A 3]

Silverjet, the last remaining business class-only airline following the recent collapses of MAXjet and Eos, said earlier it had raised USD$25 million in debt and equity from a Middle East investor, with a potential USD$75 million to follow.

 

(Reuters)

 

Sloppy research by Reuters. How about L'Avion? Or is Reuters predicting its imminent demise?

 

[Pieter C. 5]

Mushrif,

 

Agree...think they focused too much on the UK-US Trans-Atlantic flights...

[Pieter C. 5]

Another one down the drain, guys, SILVERJET STOPPED FLYING TODAY 30/05/2008 !!!

 

Imran,

 

No more white/silver 767's at DXB !!!

 

[Imran K. 0]

Imran,

 

No more white/silver 767's at DXB !!!

 

 

 

GOSH...any news as to why they stopped flying? Didnt they recently receive a capital-injection?

[Pieter C. 5]

Didnt they recently receive a capital-injection?

 

Nope, unsuccessful

 

Silverjet Stops Flights As It Runs Out Of Cash

 

May 30, 2008

Britain's Silverjet said it stopped flights on Friday after failing to get a USD$5 million loan from Abu Dhabi-based investors, becoming the third London to New York business class-only airline to run out of cash.

 

Silverjet, which along with Eos and MAXJet tried to steal away business class customers from larger carriers such as British Airways and Virgin Atlantic with cheaper tickets, more space and quicker check-ins, said its fleet of three aircraft will be grounded when the last flight returns.

 

Silverjet needs an emergency injection of cash or it will follow now-bankrupt Eos and MAXJet out of business. All three focused on the lucrative market of business people jetting between meetings in London and the US.

 

Silverjet is talking to investors about a rescue package but had "yet to conclude such discussions to its satisfaction".

 

Douglas McNeill, transport analyst at Blue Oar Securities, said: "The climate for attracting capital into the airline industry has never been worse.

 

"There was speculation Lufthansa showed an interest but if they were going to do something I think they'd have done it by now."

 

The airline, based at Luton Airport north of London, said Abu Dhabi-based fund Viceroy Holdings had failed to give it the first USD$5 million of an GBP8.4 million pounds (USD$16.6 million) loan facility it had reached initial agreement over.

 

"It is with deep regret that the board of Silverjet has decided that it must suspend operations with immediate effect," it said in a statement on Friday.

 

Shares in the airline were suspended last week after the company said it had not received the loan from Viceroy that was meant to guarantee its future in a tough economic climate.

 

In the last six months business-class-only carriers Eos and MAXJet went bust, citing increasing jet-fuel costs as the main reasons for going out of business.

 

(Reuters)

 

[Naim 6]

From The Times

June 14, 2008

 

All 420 jobs go at Silverjet as rescue fails

Peter Stiff

 

All 420 workers at Silverjet, the troubled business-class airline, lost their jobs yesterday after an attempt to get the airline flying again collapsed.

 

A rescue deal for the airline had been suggested this week by Kingplace, an Irish shell company managed by Heritage, a Swiss investment group. However, talks broke down yesterday because of problems in raising sufficient cash to satisfy the Civil Aviation Authority (CAA), the regulator. It is understood that the CAA required Kingplace to show it could provide more than £25 million of funding to the airline over the next six months.

 

Negotiations over the leases of the aircraft were also thought to be behind the collapse of the rescue deal.

 

Mark Fry, the airline's joint administrator, said: “As a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern ... we have had to make the entire workforce formally redundant, in line with our legal obligations as administrator.” Mr Fry confirmed that 420 jobs would be lost.

 

Mr Fry said he would continue to negotiate the sale of Silverjet's assets to try to repay the company's creditors.

 

The administrators were legally obliged to make redundancies under rules that stipulate jobs must go unless a buyer is found within two weeks of a company entering administration.

 

Mr Fry said that there were still other parties interested in buying the airline, although it was unlikely that a successful sale would be completed. “There's a very short window of opportunity but, as every day goes by, it gets more difficult,” he said.

 

Silverjet, which flew from Luton to New York and Dubai, is likely to go into liquidation, with a few assets, such as contracts on aircraft and departure lounge physical assets attracting some interest. The brand may also have some value.

 

However, any proceeds from these sales will make no difference to creditors or shareholders.

 

Kingplace had hoped to have Silverjet flying again within weeks and retain its staff.

 

Silverjet's shares were suspended on May 23. A week later it ceased operations and was put into administration.

 

The airline ran into difficulties as soaring fuel costs coincided with a loss of confidence that led to a sharp decrease in bookings. The company also struggled to attract customers from larger rivals.

 

The carrier, along with Maxjet and Eos, its rivals, was founded as an attempt to tap into the rapidly growing business travel market. However, the start-up carriers struggled to match the frequency of flights offered by larger rivals and other perks, such as air miles. Eos and Maxjet both filed for bankruptcy protection this year.

 

Silverjet was thought to be losing about £1 million a month last year.

 

No silver lining

 

— Silverjet was founded in 2006 by Lawrence Hunt, a member of the Foyles bookshop family, and chief executive of the airline

 

— The inaugural flight took place on January 25, 2007, from London Luton to New York

 

— A Luton-New York round trip cost Silverjet more than £44,000 in May, up from £28,600 in November 2007, according to Daniel Stewart, the investment bank

 

— Ken Livingstone, the former Mayor of London, was banned by Silverjet in January this year after he said his flight to New York with the carrier was “the worst of my life”

 

http://business.timesonline.co.uk/tol/busi...icle4132879.ece