Silverjet founder Lawrence Hunt has claimed trade support for his all-business- class airline has been disappointing because many agents were too “set in their ways”.
Hunt revealed that only 30% of his sales came through the trade, when he had expected 70%, which he believed was down to agents being overly cautious.
He was speaking after weeks of negative publicity about Silverjet, which saw its share price plummet, billionaire investors decide against taking a stake in the airline, and increased competition from BA and rival business-class airline Eos.
Hunt feared Silverjet’s share price was now so low that the airline was vulnerable to a hostile takeover, and said he may consider de-listing it from the Alternative Investment Market (Aim).
He claimed the price had dropped because Silverjet’s investors are feeling the pinch
from the credit crunch and the problems afflicting Northern Rock, and suggested there could be a deliberate attempt to talk down his company.
“There are a lot of people who would like to see us fail either because they would like to be proved right, are competitors or want to buy us as cheaply as possible,” he said.
But he invoked Second World War commander Field Marshall Montgomery to insist Silverjet would survive: “You have to work on the basis that nothing is going to go according to your plan.
As Montgomery said: ‘No battle plan has ever survived first contact with the enemy’.”
Hunt said it had been frustrating persuading agents to sell the airline. “The travel agency community is very cautious and didn’t understand the concept,” he said. “A lot are quite set in their ways. They need to learn to adapt.”
Silverjet’s share price is hovering at about 15p, down from 54p at the start of the year. Hunt said he would look at options including de-listing if publicity about the price continued to undermine its position.
“The share price is so low, we are vulnerable to a hostile takeover.”
Hunt insisted Silverjet was on course to meet its target of its first monthly profit in March, and a full- year profit in its third year of operations in 2010.
Although some high-profile agents have publically supported Silverjet (TTG February 15), others claimed its Luton location made it hard to sell. Cheryl Essam, director of Sunways Travel in Kent, said corporate clients preferred to fly with BA or Virgin Atlantic. “Everybody here understands exactly what is being offered, but corporates do not seem to want it,” she said.
Danny Price, operations manager of The Appointment Group in Kilburn, north London, said: “We don’t know the product. Eos often comes in to see us, so we know what the seat is like. And we are familiar with BA products, which are always in demand.”
Tracy Hirsz, national account manager for Gold Medal, said it had taken time for agents to “understand and believe” in Silverjet, although sales had picked up after fam trips to New York and Dubai.
Other travel businesses on the Aim agreed that market volatility was undervaluing companies.
Travelzest chief executive Chris Mottershead said Aim’s trading mechanism made companies more vulnerable to steep drops in share prices if only one or two investors decided to sell.
Western & Oriental chairman David Howell said Silverjet’s price was suffering because of Maxjet’s demise, but that did not affect operations, and its value was likely to rise.
from ttg