Maxjet
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Keypilot: The significance of this is what it says for the concept of all-business class travel, a new (and therefore small) but also potentially significant sector.
European majors - 52.2%
US majors - 46.3%
European leisure carriers - 1.5%
Premium fare carriers - 0.1%
Significant?
Join Date: Feb 2006
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This is just an observation, read into it how you like but........... I find it extraordinary how often at least one (sometimes 3) MaxJet 76's are parked up at STN. How can any business model work with 3 aeroplanes parked up simultaniously. It surely can't be tech problems due to the frequency.
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exeng
I am sorry, but you are completely wrong about Silverjet.
According to Mike Hunt (or is it Laurence?), business couldn't be better. With seat load factors at 80%, the airline is a runaway success !!
I love flying Silverjet !! It is the only airline where I can buy a seat for £995 when the cost of that seat to the airline is nearer £2,000. Now that's value for money.
I hate to lose out on the next big thing; I must call my stock broker first thing on Monday.
I am sorry, but you are completely wrong about Silverjet.
According to Mike Hunt (or is it Laurence?), business couldn't be better. With seat load factors at 80%, the airline is a runaway success !!
I love flying Silverjet !! It is the only airline where I can buy a seat for £995 when the cost of that seat to the airline is nearer £2,000. Now that's value for money.
I hate to lose out on the next big thing; I must call my stock broker first thing on Monday.
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Its alright sayign that 80% LF business is good
they could be selling the seats at a loss to achieve the 80% LF
honest some people dont know around airline economics
they could be selling the seats at a loss to achieve the 80% LF
honest some people dont know around airline economics
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On 14 June 2007, Maxjet floated on the AIM market and raised £47.3m, net of expenses. Six months later it has run out of money. Load factor November 69% which is not that bad. Put this together and it tells you that the cost model is completely wrong. I'd imagine there's some rather angry shareholders out there.
American Airlines starting up on the New York - Stansted route a few weeks ago was presumably the final nail.
American Airlines starting up on the New York - Stansted route a few weeks ago was presumably the final nail.
If MAXjet are incorporated in the UK (which I guess they are if they're quoted on AIM) then there's no Chapter 11 - unlike the USA, the UK does not provide legal protection for failed companies. Insolvency means going into administration.
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December, 2007
Silverjet flies to the rescue of Maxjet customers
Silverjet, the British airline that offers a private jet experience at a fraction of the price, has today announced that it is to make a limited number of seats available to Maxjet customers travelling today (Friday 7) and tomorrow (Saturday 8). The news will come as a welcome relief to the many passengers worried about possible flight cancellations following Maxjet’s announcement this morning that it has suspended the trading of its shares pending clarification of its financial position.
Silverjet flies to the rescue of Maxjet customers
Silverjet, the British airline that offers a private jet experience at a fraction of the price, has today announced that it is to make a limited number of seats available to Maxjet customers travelling today (Friday 7) and tomorrow (Saturday 8). The news will come as a welcome relief to the many passengers worried about possible flight cancellations following Maxjet’s announcement this morning that it has suspended the trading of its shares pending clarification of its financial position.
This must be a first - a competitor offering a rescue mission while the competition is still operating its flights. Nasty business....
I thought that was quite clever, actually. It will be to Silverjet's advantage if MAXjet go bust, so it is therefore rational for them to take any steps they can to help achieve this without breaking the law.
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In the short term it won't do Silverjet any good at all and they'd better have plenty of cash to ride the lack of consumer confidence that will follow if the worst does happen to Maxjet. Nothing I hear from inside Silverjet suggests they are any better.
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Why dont American Airline announce a rescue package to uplift Silverjet passengers.... Great way to steal your competition??!
If Maxjet doesnt survive, I really hope Silverjet go bust soon after. It's the dirtiest of tricks I have seen!
If Maxjet doesnt survive, I really hope Silverjet go bust soon after. It's the dirtiest of tricks I have seen!
Join Date: Jun 2001
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Looks like MJ100 JFK-STN made it over today so perhaps operations are indeed normal for the moment. Often, aircraft will be impounded by local officials on arrival when suppliers are not paid. MAXjet seems to be based in the U.S. so perhaps a chapter eleven filing is imminent. There is a cottage industry of maintaining airline operations in bankruptcy, it keeps lawyers and investment bankers gainfully employed.
It is traditional for other carriers to honor tickets on an airline that has shut down. Also, as a courtesy, crewmembers are given rides home. However, in the post-911 world this may be a little more complex to authorize should it come to that. And yes, it does seem a little premature for Silverjet to make the offer.
It is traditional for other carriers to honor tickets on an airline that has shut down. Also, as a courtesy, crewmembers are given rides home. However, in the post-911 world this may be a little more complex to authorize should it come to that. And yes, it does seem a little premature for Silverjet to make the offer.
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In the short term it won't do Silverjet any good at all and they'd better have plenty of cash to ride the lack of consumer confidence that will follow if the worst does happen to Maxjet. Nothing I hear from inside Silverjet suggests they are any better.
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Key Pilot
What can be good about it?
Silverjet has an almost identical business model to MaxJet but costs are probably higher because of 'product differentiators' like the dedicated lounges or terminals (call them what you like!) Its evident the model requires substantial amounts of cash to keep it alive long enough to generate critical mass.......and generating the mass merely increases cash burn. Take a close look.....SJ demand extra financing everytime they introduce a new [old] aircraft and two more are pending in MAR 08.
I'm not sure the Reubens are in this for fun. The probable scenario is that they let it continue towards expending all the cash generated in the last round of financing, hope it survives long enough for the brand to develop some real value (goodwill on the books) and then and then pick it off cheap leaving investors with nothing and taking it private. If that doesn't happen then they have spent some pocket money and the business will go the same way as Maxjet (whatever that proves to be) and, no doubt, EOS will follow at some point. By the way, as a US corpration I believe MaxJet will have the benefit of Chapter 11 even if the last round of funding was raised in the UK; ironically, this gives them an advantage over UK airlines.
For the all business class model to work, theyneed to keep costs low. They (SJ and Max) are all spending fortunes on PR (how many freebies are going to journos, award givers and 'influencers'?) and marketing (TV adverts, loads of internet advertising, magazines and airport and roadside hoardings etc.) to develop a brand in the vain hope of adding enough value to attract a buyer before the inevitable cash exhaustion.
LoCo Business Airlines need to embrace the tricks employed by proper LoCo airlines such as Ryan and Easy. LoCo airlines do not differentiate; they drive down cost and maximise revenue. At the moment costs are increasing rapidly for airlines, mainly due to fuel, but the fares at the all business class airlines don't seem to be keeping pace with those increases - in fact they are under pressure from the legacy carriers (BA have an offer for £1200 Club World return to NY at the moment).
LoCo models rely on LF (equivalent to volume sales in discount supermarkets).......but LF is not the panacea to success in an airline so don't read too much into the monthly figures from each of these airlines. Anyone can sell a £1 for 50p or in the case of the all business class model anyone call sell a £2000 seat for £999. If the product is as good at it is alleged by them it should warrant a premium, not a discount.
Maxjet and Silverjet are wholly comparable (EOS to a lesser degree because of their higher fares and top end target market) and therefore it does not bode well for SJ. Its a shame but the all business class model appears to be fundamentally flawed. I wish them all well..... but I fear for them.
That said, this should be a wake up call for SJ, EOS and L' Avion in France - hopefully their management teams will act upon it!
What can be good about it?
Silverjet has an almost identical business model to MaxJet but costs are probably higher because of 'product differentiators' like the dedicated lounges or terminals (call them what you like!) Its evident the model requires substantial amounts of cash to keep it alive long enough to generate critical mass.......and generating the mass merely increases cash burn. Take a close look.....SJ demand extra financing everytime they introduce a new [old] aircraft and two more are pending in MAR 08.
I'm not sure the Reubens are in this for fun. The probable scenario is that they let it continue towards expending all the cash generated in the last round of financing, hope it survives long enough for the brand to develop some real value (goodwill on the books) and then and then pick it off cheap leaving investors with nothing and taking it private. If that doesn't happen then they have spent some pocket money and the business will go the same way as Maxjet (whatever that proves to be) and, no doubt, EOS will follow at some point. By the way, as a US corpration I believe MaxJet will have the benefit of Chapter 11 even if the last round of funding was raised in the UK; ironically, this gives them an advantage over UK airlines.
For the all business class model to work, theyneed to keep costs low. They (SJ and Max) are all spending fortunes on PR (how many freebies are going to journos, award givers and 'influencers'?) and marketing (TV adverts, loads of internet advertising, magazines and airport and roadside hoardings etc.) to develop a brand in the vain hope of adding enough value to attract a buyer before the inevitable cash exhaustion.
LoCo Business Airlines need to embrace the tricks employed by proper LoCo airlines such as Ryan and Easy. LoCo airlines do not differentiate; they drive down cost and maximise revenue. At the moment costs are increasing rapidly for airlines, mainly due to fuel, but the fares at the all business class airlines don't seem to be keeping pace with those increases - in fact they are under pressure from the legacy carriers (BA have an offer for £1200 Club World return to NY at the moment).
LoCo models rely on LF (equivalent to volume sales in discount supermarkets).......but LF is not the panacea to success in an airline so don't read too much into the monthly figures from each of these airlines. Anyone can sell a £1 for 50p or in the case of the all business class model anyone call sell a £2000 seat for £999. If the product is as good at it is alleged by them it should warrant a premium, not a discount.
Maxjet and Silverjet are wholly comparable (EOS to a lesser degree because of their higher fares and top end target market) and therefore it does not bode well for SJ. Its a shame but the all business class model appears to be fundamentally flawed. I wish them all well..... but I fear for them.
That said, this should be a wake up call for SJ, EOS and L' Avion in France - hopefully their management teams will act upon it!