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We won't pretend to understand all the business-side stuff, other than to say that clearly not enough people were flying. Surprisingly, airline officials didn't blame fuel prices, instead saying the deal fell apart:
As a result of the unusually complex negotiations with third parties.
The entire 420-person staff of Silverjet has been laid off.
But spokesman Greg Maliczyszyn--who's probably been having two really rough weeks--just emailed us to announce that a preliminary deal has been made to re-launch Silverjet. But don't pop those corks just yet: A contract making the deal official still hasn't been signed. (The airline says things should be official by June 13.)
While there might be some folks cheering the airline's (potential) rebirth, we have to wonder how many passengers will rush back to the brand. What's that they say about fooling us twice?
It wasn't too surprising to learn that Silverjet was the latest all business class carrier to ground its planes. After all, we've seen all business class carriers go down before. Unfortunately, some travelers had tickets on Silverjet.
Passenger Grant Godwin had his sweet Dubai birthday party ruined:
Twelve of us were supposed to be flying out to Dubai this evening for my 40th--disappointed is not the word.
Passenger Allan Cabridge was planning a trip to the States:
I'm a businessman and regularly use Silverjet to fly to America. I'm shocked and disappointed to learn of its closure ... I'm just glad I'm flying with another airline today.
At least when you travel on a ticket that costs upwards of £1,000, you can probably afford some alternate transportation. The most unfortunate population in the recent string of closures is employees.
Silverjet has gone the way of Maxjet and Eos, grounding its planes after running out of cash. The all business class carrier was the last to fly the NYC to London route, but despite promises of financing, the money just never materialized.
CEO Lawrence Hunt put out a statement on Silverjet's website:
Your belief in us was shared by our investors--but regrettably, due to unforeseen circumstances, they were unable to unlock the finance that we needed. As a result, we are very sad to announce that from May 30, 2008, we will cease operations and we are no longer able to honor flight reservations.
That leaves L'Avion, which has a deal with British Airways' new spin-off OpenSkies, as the last transatlantic biz class carrier. An industry analyst gave Bloomberg one last--surprisingly sweet--comment on Silverjet:
It's sad in a way because they did make a lot of customers happy over the time they were operating.
· Silverjet Stops Flights as Oil Costs Cripple Industry [Bloomberg]
· Silverjet Ceases Operations [Travel Weekly UK]
· All Business Class Carriers coverage [Jaunted]
Last man standing Silverjet has just announced it's picked up another investor. The deal starts with $25 million in cash and debt that will shore up the airline's finances. If things go well, another $75 million could come through in exchange for two seats on the Silverjet board. Though announced, there's a slight chance the money could be withdrawn, in which case the carrier will almost certainly end up like its rivals.
CEO Lawrence Hunt says the investment should make people more likely to fly with his airline:
The primary issue we've had is a lack of confidence in the sector, but this $100 million investment should restore that confidence. We've had a lot of travel agents and companies holding back from booking with us until our future is secure and this investment obviously secures that future.
We wouldn't say a secure future is "obvious," but $100 million is certainly a lot of green. Interestingly, the money is coming from an investor in the UAE, which is home to Silverjet's newest destination, Dubai. Could an eastward expansion be in the works?
· Silverjet Surges on $100 Million Investment Pledge [Bloomberg]
· Airline Merger Guessing Game: Who Would Buy Silverjet? [Jaunted]
· Fawning over Silverjet's New Mobile Website [Jaunted]
· All Business Class Carriers coverage [Jaunted]
Why should domestics carriers get all the press? Eos Airlines--which kicked it biz class between NYC and London--made its final two flights Sunday. All future flights were canceled.
Leave it to a carrier that hypes how exclusive it is to leave passengers so royally screwed. Silverjet has stepped in to help out--and, the competitor undoubtedly hopes, earn some new customers. The only remaining biz class carrier still doing NYC-London will fly stranded passengers home for the same price they paid on Eos.
Interestingly, now-bankrupt Eos just sent out an email last week announcing:
Now we have a term sheet with a current investor for the financing needed to take us to corporate profitability in 2009.
Seems that deal wasn't as done as anyone expected. The carrier even addressed its deal-making trouble in its final press release:
It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed.
Your move, Silverjet.
Only hours after we heard that Silverjet was this close to getting acquired, we met up with George Henderson, the carrier's IT director. True enough, he told us, there's some interest in the airline--but nothing's set in stone. But that's not why we were chatting. We wanted to know more about Silverjet's newly launched mobile website.
The short review? It's really cool. George pulled it up live and showed us how to check the status of a flight, how to request a special meal, how to get terminal maps and even how to buy tickets via BlackBerry. Seriously. (JAL already does 5 percent of its bookings via mobile.)
Someone--and we don't yet know who--just offered to take over Silverjet, one of a couple biz-class-only transatlantic airlines. Though its been flying since January 2007, the airline has yet to make any money.
That has us wondering who might've offered to buy it. British Airways is starting its own schmancy transatlantic service, and the deep-pocketed Virgin Atlantic doesn't need to take over a rival--it could just expand. John Weikle has more time on his hands, but Silverjet seems a bit too ritzy--and international--for his tastes.
Despite the shutdowns of niche long-haul carriers like Maxjet and Oasis, analysts are split on whether Silverjet has a chance at turning a profit anytime soon. The airline did carry a record number of passengers in March.
Joe Sharkey / New York Times / British Airways / Maxjet / Eos / L'Avion / Silverjet / All Business Class Carriers / → All Tags
The passengers hung out to dry by Maxjet's bankruptcy may not agree, but the all-biz-class airline sector is booming. While Eos, Silverjet and L'Avion were likely popping champagne corks when the competition went belly up, they won't be as happy to hear that British Airways and Virgin Atlantic are joining the fray.
BA's secret plans--known as Project Lauren--could be introduced by next week, with transatlantic service between the New York area and a European city starting by May. Thanks to the Open Skies agreement, it's hard to say which city it might be, though Joe Sharkey at the New York Times says Paris is a possibility. (That'd put British Airways in direct competition with L'Avion.)
While Virgin is at work on something, details are still a bit sketchy. In the meantime, the existing boutique carriers are acquiring more planes and looking to expand, making a stylish flight to Europe more available than ever.
· Despite One Failure, Growth Is Seen in Coachless Flights [NYT]
· Maxjet coverage [Jaunted]
· Eos coverage [Jaunted]
[Photo: Martin Third Av'n]
A few more passengers might help...
Swanky transatlantic carriers were so hot in '06, but it looks like the fire might be dying down. Maxjet suspended trading of its shares on Friday, "pending clarification of its financial position." The airline has been hemorrhaging cash, and that's the likely cause of its current trouble.
To make things worse, while the airline offers nicer service than standard issue coach, it's not on the same level as competitors Silverjet or Eos. And industry analysts say there are some fundamental problems in the way Maxjet operates: namely, they keep one plane grounded as a spare (expensive!) and fail to deliver on promised top-notch service. Certainly doesn't seem like the way to keep your company's financial position in the black.
· Maxjet Share Trading Halted [Financial Times]
· Maxjet Suspends Shares Over Liquidity Fears [Times Online]
· Maxjet Stock Down 45% Since June [Google Finance]
· Despite Fears Maxjet Says It's "Business as Usual" [AP, via Portfolio]
· Is the End Near for Maxjet? [Upgrade Travel Better]
Silverjet, the all-biz carrier that not too long ago announced Dubai service, just inked a deal to acquire two more Boeing 767s. That'll take the fleet size up to five aircraft and hopefully put an end to its occasional scheduling troubles.
The new planes will of course have all the standard Silverjet** amenities like power outlets, individually served food and drink, lots of in-flight entertainment options and no more than 100 passengers per flight. (In November, about 55 percent of each flight's seats were filled, so there's plenty of space on board.)
With the new aircraft, Silverjet hopes to expand its route network beyond the current Newark-Luton and Luton-Dubai options. In view for the carrier are New Delhi, Johannesburg, Shanghai and Los Angeles. Also a possibility--and we're trying to figure this one out--is the Indian Ocean island of Mauritius. Could Silverjet be a fan of Amazing Race?
** which sometimes advertises on Jaunted
· Silverjet Flight Review: Still Not the Gold Standard [Jaunted]
· Silverjet's In-Flight Girl on Girl Lav Action [Jaunted]
· New Routes coverage [Jaunted]
Many pundits like all-business-class Silverjet for its valet service, which lets customers drive up to the curb, hand off their keys, wait inside and have their boarding passes delivered directly to them in the waiting area. The quick check-in process is a major plus, too: Most passengers say it takes less than 10 minutes from ticket counter to departure gate. But when it comes to on-time flights and cancellations, Silverjet's hardly the best.
It seems a number of travelers have had legs of their trips canceled as the relatively new airline works to get itself off the ground. And while alternative options are usually offered, they aren't always convenient. Here's FlyerTalker herbchris53's experience, after one of the airline's planes had to be taken out of service:
A few months ago, I was going to book a JFK-LHR flight with BA in June/July, when I saw an ad for SilverJet offering a free segment for NYC-LON flights. I booked with SilverJet instead. $1084 return - hooray!
They just called me to say that the 16:45 return flight I booked is "no longer available" and I can take the 10:00 that day or the 16:45 the next day. My schedule does not permit either, so now 24 days before departure, I have to start looking for a new flight.
I guess that's what you get from an operator with a handful of planes.
If you're willing to take the risk, this can be an affordably classy way to fly. But if arriving on time and avoiding canceled flights is a chief concern, it may be best to book elsewhere.