Maxjet
Join Date: Mar 2005
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You will probably find that the alternative flights will be paid directly by the licencing / bond authority. In the Uk its the CAA, through the ATOL protection scheme, of which any uk airline/tour operator must be a member. - I presume the US authorities have a similar system. My company has been chartered directly by the caa several times in the past, to operate repatriation flights.
Good luck to the staff though, hope they find new employment soon.
Join Date: Oct 2007
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Have used maxjet a number of times and had booked las vegas for 2008.
will have to look for another flight. But what bad timing for both pass and crew. I can rebook but I feel for the crew who worked so hard for this airline. THANKS GUYS AND GOOD LUCK IN 2008 YOU WERE GREAT!
will have to look for another flight. But what bad timing for both pass and crew. I can rebook but I feel for the crew who worked so hard for this airline. THANKS GUYS AND GOOD LUCK IN 2008 YOU WERE GREAT!
Join Date: Sep 2007
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Silverjet or Eos?
stormin norman, I wouldn't neccessarily say SJ or E0 would be going bust in the near future. I always would have said they were the strongest two, although I've heard SJ isn't too good in the financial dept at the moment.
Join Date: Apr 2007
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Either way with Maxjet off the scene, it should help Eos and Silver Jet with bookings in the short run. Both have a very good product for those who like business class but can not afford it on the likes of BA. But to be honest I was going to travel business class, it would have to be BA only.
Join Date: Dec 2007
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From the Times;
"Last month Silverjet, Maxjet’s main rival in the transatlantic premium business-class market, was given a £22 million lifeline after taking heavier than expected losses in its first year. It was the second time that Silverjet had been forced to refinance since its float in May. "
"Last month Silverjet, Maxjet’s main rival in the transatlantic premium business-class market, was given a £22 million lifeline after taking heavier than expected losses in its first year. It was the second time that Silverjet had been forced to refinance since its float in May. "
Join Date: Aug 2004
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£10m of the lifeline is a short term loan. This may be converted to shares later or have to be repaid. It had a £12m share issue at 60p/share just before Maxjet went down. In my view it will need another lifeline every 9 months for a few years. in 2008 money supply will be tight and an airline needing its 4th round of funding is going to find it very hard..
Join Date: Jun 2006
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Befree, you are quite right. This model is evidently far more cash intensive than any of the airlines thought or planned.
SJ maintain they will be cash positive (operational level) in 2008 but they will require inordinate amounts of money to fund expansion, especially aircraft introductions, and to service their expensive product.
EOS stand the best chance of success, they are working on service differential ahead of cost differential. The market for these carriers is small and there is not enough enough room for too many of these carriers.
With open skies looming business class fares on legacy carriers will only go one way - down - and then the all business class carriers lose their only advantage, price differential.
Maxjet demise is not good news for the sector.
SJ maintain they will be cash positive (operational level) in 2008 but they will require inordinate amounts of money to fund expansion, especially aircraft introductions, and to service their expensive product.
EOS stand the best chance of success, they are working on service differential ahead of cost differential. The market for these carriers is small and there is not enough enough room for too many of these carriers.
With open skies looming business class fares on legacy carriers will only go one way - down - and then the all business class carriers lose their only advantage, price differential.
Maxjet demise is not good news for the sector.
Join Date: Jan 2007
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ZOOM
I did read a few days ago that now Zoom will be operating LGW-JFK for £125 + VAT with a chance of an upgrade for £50.
So what does this say about Maxjet now if a budget airline like Zoom think they can make it work?
So what does this say about Maxjet now if a budget airline like Zoom think they can make it work?
Join Date: Aug 2000
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"wantabe_crew" You are sort of comparing a Ford car to Rolls Royce car, no contest.
Both Maxjet and Silverjet offer a business product with so called flat beds, Zoom is offering a upgraded economy product, so they are not like for like products.
Both Maxjet and Silverjet offer a business product with so called flat beds, Zoom is offering a upgraded economy product, so they are not like for like products.
Join Date: Oct 2002
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The product may be good but its the frequency of services thats the big seller to the businessman ,and the fact that the big airlines usually have big back up when things go wrong.You don't get that with small one man bands (ask the guy who's just lost £2.5K in tickets further up the thread)
Silverjets share price is down to 55p today so i'm not that optimistic it will ride the storm ahead.
Silverjets share price is down to 55p today so i'm not that optimistic it will ride the storm ahead.
Last edited by stormin norman; 27th Dec 2007 at 16:03.
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Continuing the thread od what you get for your monies. The big problem for most non LHR / LGW USA flights is the cost of the operation. It does not matter how good your service is you have to compete £ for £ and the huge pressure that will be applied to all carriers come the 'open Sky' later this year will make the market impossible for the niche player. I wonder if EOS and Silver took account of the Bermuda agreement and perhaps saw no agreement for a few more years, allowing them a longer honeymoon period. With regard to the service provided by the majors that in itself is not the real issue as most night flts USA - UK there is no service - Club or First?
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Stormin Norman
You are correct, the frequency of service is indeed the big seller.
That is why EOS will (I hope) succeed, they put all their eggs in JFK, unlike Maxjet. I will miss their 767's at STN.
That is why EOS will (I hope) succeed, they put all their eggs in JFK, unlike Maxjet. I will miss their 767's at STN.
Last edited by Stanstedeye; 28th Dec 2007 at 10:36. Reason: title change
Join Date: Aug 2007
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I think one of the main problems for Maxjet was that they weren't really in the business market. They had old business class seats which were perfectly fine, but they were pricing themselves at the bottom of the biz market and were actually in the Premium Economy market most of the time, which is far more geared towards the leisure market. They seemed to be doing well for leisure passengers on the times I flew with them, but struggling for the business travellers.
My abiding memory of them was earlier this year at a snowy (and closed) Stansted airport waiting in the lounge and wondering whether we would be delayed 24 hours to JFK. After a couple of hours and promises by the Maxjet lounge staff that we would be going today, the airport managed to open up and down came the Maxjet plane that had been circling for 3 hours. It wasn't quite a rescue from a desert island, but it felt a little like it at the time.
My abiding memory of them was earlier this year at a snowy (and closed) Stansted airport waiting in the lounge and wondering whether we would be delayed 24 hours to JFK. After a couple of hours and promises by the Maxjet lounge staff that we would be going today, the airport managed to open up and down came the Maxjet plane that had been circling for 3 hours. It wasn't quite a rescue from a desert island, but it felt a little like it at the time.
An article in today's "Telegraph" suggests the demise of Maxjet was down to management errors.
It cites in particular:
1. Using US lawyers and Chapter 11 - the suggestion being that using the UK system may have bought a couple more weeks to arrange a re-financing.
2. Routes to Las Vegas and LA were not served daily, thereby making the service less attractive to the target business audience.
3. Choice of aircraft. The 762 was not fuel efficient, nor had the best 'operating profile'. It also suggests that they did not have ETOPS approval, thereby affecting their transatlantic routings, increasing costs.
4. Offering an aspirational level of service without key factors, such as flat-bed seats and private check-in, as offered by their competitors (or at least Silverjet).
5. Keeping one aircraft (of a fleet of 6) on permanent standby, described as 'ruinously expensive'.
The full article is at
http://www.telegraph.co.uk/money/mai...cmaxjet130.xml
It cites in particular:
1. Using US lawyers and Chapter 11 - the suggestion being that using the UK system may have bought a couple more weeks to arrange a re-financing.
2. Routes to Las Vegas and LA were not served daily, thereby making the service less attractive to the target business audience.
3. Choice of aircraft. The 762 was not fuel efficient, nor had the best 'operating profile'. It also suggests that they did not have ETOPS approval, thereby affecting their transatlantic routings, increasing costs.
4. Offering an aspirational level of service without key factors, such as flat-bed seats and private check-in, as offered by their competitors (or at least Silverjet).
5. Keeping one aircraft (of a fleet of 6) on permanent standby, described as 'ruinously expensive'.
The full article is at
http://www.telegraph.co.uk/money/mai...cmaxjet130.xml
An article in today's "Telegraph" suggests the demise of Maxjet was down to management errors.
It cites in particular:
1. Using US lawyers and Chapter 11 - the suggestion being that using the UK system may have bought a couple more weeks to arrange a re-financing.
2. Routes to Las Vegas and LA were not served daily, thereby making the service less attractive to the target business audience.
3. Choice of aircraft. The 762 was not fuel efficient, nor had the best 'operating profile'. It also suggests that they did not have ETOPS approval, thereby affecting their transatlantic routings, increasing costs.
4. Offering an aspirational level of service without key factors, such as flat-bed seats and private check-in, as offered by their competitors (or at least Silverjet).
5. Keeping one aircraft (of a fleet of 6) on permanent standby, described as 'ruinously expensive'.
The full article is at
http://www.telegraph.co.uk/money/mai...cmaxjet130.xml
It cites in particular:
1. Using US lawyers and Chapter 11 - the suggestion being that using the UK system may have bought a couple more weeks to arrange a re-financing.
2. Routes to Las Vegas and LA were not served daily, thereby making the service less attractive to the target business audience.
3. Choice of aircraft. The 762 was not fuel efficient, nor had the best 'operating profile'. It also suggests that they did not have ETOPS approval, thereby affecting their transatlantic routings, increasing costs.
4. Offering an aspirational level of service without key factors, such as flat-bed seats and private check-in, as offered by their competitors (or at least Silverjet).
5. Keeping one aircraft (of a fleet of 6) on permanent standby, described as 'ruinously expensive'.
The full article is at
http://www.telegraph.co.uk/money/mai...cmaxjet130.xml
Join Date: Jan 2008
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Telegraph article seems very accurate
Does it not at all seem odd that shortly after MY floated on AIM and eliminated all their debt (much of which was owed to their founders) that the airline goes down in flames and none of the original investors are willing to prop it up? Seems almost criminal that all the original investors received full payouts of their investments immediately after the AIM closing. In one case the mid-year earnings release mentions a loan to a related-party for 18.5% interest.
What exactly did these AIM investors believe they were buying? The chance to transfer $50m of debt or the opportunity to invest in the airlines furture? The money didn't go to their future.
To see more, read the notes to consolidated financial statements (http://www.digitallook.com/news/rns/...2-231550/MAXJ-Interim_Results.html) Sorry about the long link, I never remember how to condense it. I've also made some interesting notations below.
Usage of proceeds from the AIM listing:
MAXjet raised $93.7 million after expenses and was admitted successfully to AIM in June 2007. In connection with the AIM offering all preferred stock converted to common and all debt was retired. Prior to admission the Company had outstanding $6.8 million of preferred stock, $9.7 million of convertible debt (Term A, including PIK interest), $30.5 million of non-convertible debt (Term B) and a $1.5 million credit facility.
After retiring debt, the Company had $50.3 million in unrestricted cash as of 30 June 2007.
Impact of all the cancellations:
Passenger Service Expenses. These expenses increased from $3.3 million in the first half of 2006 to $7.8 million in the first half of 2007. During late May and June 2007 one of the Company's three active B767s was out of service for an extended period. MAXjet continued to operate all scheduled markets through this period. MAXjet contracted with two charter airlines to operate VIP-configured aircraft on a wet-lease basis on the Washington route.
Were these interim financing moves fiscally responsible to the company's bottom line or the shareholders who acquired the debt? See the example of the 18.5% interim note adjustment that was initiated when it was known the AIM float was to occur.
On December 31, 2006, the Company signed an Amended and Restated Credit Agreement (the "Agreement") with existing and new lenders that became effective on January 12, 2007 following a required equity financing of at least $7 million as described below. Additionally, the Agreement was amended in April 2007 to extend the maturity date of the loans, as well as other modifications ("April Amendment"). The amended terms are listed below.
The Agreement consisted of segmented terms as follows:
• Term A Loans consisting of $9 million in new financing with an option to increase borrowings by an additional $2 million; and
• Term B Loans consisting of; (i) senior unsecured notes in the amount of $27 million issued in September 2006; (ii) an additional note for $2 million with the same terms as the senior unsecured notes; and, (iii) $1.5 million of the $3 million loan received in July 2006 from two stockholders of the Company used as a deposit to secure the purchase of two aircraft (see Note 3 - Leases, Including Leases with Related Parties).
Thus, the Agreement covered $11 million of new debt (with a provision to increase this amount by $2 million) and $28.5 million of existing debt.
The Loans were amended to bear interest at 18.5% as follows: "Until the earlier of (i) the date of the Qualified IPO and (ii) June 30, 2007, Interest on the Term B Loans shall cease to bear cash interest on the unpaid principal amount thereof and such Loan shall instead bear payable-in-kind interest ("PIK Interest") on the unpaid principal amount thereof at a rate of 18.5% per annum, which PIK Interest shall accrue and be added and capitalized to the principal outstanding balance of such Loan on a monthly basis."
I can't imagine that the institutional investors who invested in the company will go away without inquiring about the obvious.... where did all the money go? Why were the same investors who were repaid after the AIM float unwilling to come to the table to salvage their own company? Clearly they knew what a poor investment it would have been.
What exactly did these AIM investors believe they were buying? The chance to transfer $50m of debt or the opportunity to invest in the airlines furture? The money didn't go to their future.
To see more, read the notes to consolidated financial statements (http://www.digitallook.com/news/rns/...2-231550/MAXJ-Interim_Results.html) Sorry about the long link, I never remember how to condense it. I've also made some interesting notations below.
Usage of proceeds from the AIM listing:
MAXjet raised $93.7 million after expenses and was admitted successfully to AIM in June 2007. In connection with the AIM offering all preferred stock converted to common and all debt was retired. Prior to admission the Company had outstanding $6.8 million of preferred stock, $9.7 million of convertible debt (Term A, including PIK interest), $30.5 million of non-convertible debt (Term B) and a $1.5 million credit facility.
After retiring debt, the Company had $50.3 million in unrestricted cash as of 30 June 2007.
Impact of all the cancellations:
Passenger Service Expenses. These expenses increased from $3.3 million in the first half of 2006 to $7.8 million in the first half of 2007. During late May and June 2007 one of the Company's three active B767s was out of service for an extended period. MAXjet continued to operate all scheduled markets through this period. MAXjet contracted with two charter airlines to operate VIP-configured aircraft on a wet-lease basis on the Washington route.
Were these interim financing moves fiscally responsible to the company's bottom line or the shareholders who acquired the debt? See the example of the 18.5% interim note adjustment that was initiated when it was known the AIM float was to occur.
On December 31, 2006, the Company signed an Amended and Restated Credit Agreement (the "Agreement") with existing and new lenders that became effective on January 12, 2007 following a required equity financing of at least $7 million as described below. Additionally, the Agreement was amended in April 2007 to extend the maturity date of the loans, as well as other modifications ("April Amendment"). The amended terms are listed below.
The Agreement consisted of segmented terms as follows:
• Term A Loans consisting of $9 million in new financing with an option to increase borrowings by an additional $2 million; and
• Term B Loans consisting of; (i) senior unsecured notes in the amount of $27 million issued in September 2006; (ii) an additional note for $2 million with the same terms as the senior unsecured notes; and, (iii) $1.5 million of the $3 million loan received in July 2006 from two stockholders of the Company used as a deposit to secure the purchase of two aircraft (see Note 3 - Leases, Including Leases with Related Parties).
Thus, the Agreement covered $11 million of new debt (with a provision to increase this amount by $2 million) and $28.5 million of existing debt.
The Loans were amended to bear interest at 18.5% as follows: "Until the earlier of (i) the date of the Qualified IPO and (ii) June 30, 2007, Interest on the Term B Loans shall cease to bear cash interest on the unpaid principal amount thereof and such Loan shall instead bear payable-in-kind interest ("PIK Interest") on the unpaid principal amount thereof at a rate of 18.5% per annum, which PIK Interest shall accrue and be added and capitalized to the principal outstanding balance of such Loan on a monthly basis."
I can't imagine that the institutional investors who invested in the company will go away without inquiring about the obvious.... where did all the money go? Why were the same investors who were repaid after the AIM float unwilling to come to the table to salvage their own company? Clearly they knew what a poor investment it would have been.