SilverJet (Merged 30/05)
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Daily Telegraph on Silverjet/Maxjet today
In todays DT:
Business airline Silverjet boosted rivals collapse
By Jonathan Russell
Last Updated: 1:32am GMT 04/01/2008
Business class only airline Silverjet saw passenger numbers rise 12pc in December as it benefited from the collapse of rival Maxjet.
In its monthly trading update, Silverjet said it had picked up 800 bookings from passengers with tickets on Maxjet services since the company filed for bankruptcy at the end of last year.
Chief executive Laurence Hunt said: "We have booked 800 seats from Maxjet in the past two weeks.
Before Maxjet ceased to operate, our average yield was more than 50pc higher than Maxjet's and revenue per aircraft was two and a half times higher than Maxjet's in our first half year of operation."
However, Silverjet is operating at below its break-even level.
December statistics showed the airline, which has a private terminal at Luton, was operating with 53pc of seats filled, below its target of 65pc.
Mr Hunt said: "At an operational level we should be profitable by March.
"We have proved we can make money with three aircraft and with two more planes in March we should be able to be more profitable."
He said the company was looking at various routes for the new aircraft including Delhi, Johannesburg and various US cities. The new routes should launch in June.
Maxjet went under after struggling to raise additional finance.
But Mr Hunt said he was confident about the future, having just raised a further £22m funding to pay for Silverjet's expansion programme.
He added: "Forward bookings remain strong for our New York and Dubai services and yields are ahead of expectations."
http://www.telegraph.co.uk/money/mai...4/cnjet104.xml
Business airline Silverjet boosted rivals collapse
By Jonathan Russell
Last Updated: 1:32am GMT 04/01/2008
Business class only airline Silverjet saw passenger numbers rise 12pc in December as it benefited from the collapse of rival Maxjet.
In its monthly trading update, Silverjet said it had picked up 800 bookings from passengers with tickets on Maxjet services since the company filed for bankruptcy at the end of last year.
Chief executive Laurence Hunt said: "We have booked 800 seats from Maxjet in the past two weeks.
Before Maxjet ceased to operate, our average yield was more than 50pc higher than Maxjet's and revenue per aircraft was two and a half times higher than Maxjet's in our first half year of operation."
However, Silverjet is operating at below its break-even level.
December statistics showed the airline, which has a private terminal at Luton, was operating with 53pc of seats filled, below its target of 65pc.
Mr Hunt said: "At an operational level we should be profitable by March.
"We have proved we can make money with three aircraft and with two more planes in March we should be able to be more profitable."
He said the company was looking at various routes for the new aircraft including Delhi, Johannesburg and various US cities. The new routes should launch in June.
Maxjet went under after struggling to raise additional finance.
But Mr Hunt said he was confident about the future, having just raised a further £22m funding to pay for Silverjet's expansion programme.
He added: "Forward bookings remain strong for our New York and Dubai services and yields are ahead of expectations."
http://www.telegraph.co.uk/money/mai...4/cnjet104.xml
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Difficult to ascertain if this company will stay the course or not. Their loads are poor by anyone's standard although with a completely premium product you would assume that they don't necessarily need 80% + but their associated costs will be substantially higher as well (limos, lounges etc).
Not a good sign to be having to return to markets / financiers every time they want to expand though. Quite a high risk strategy which will either result in fantastic profit levels in 2-3 years time or a messy demise in the next 12-18 months when the money runs out.
Not a good sign to be having to return to markets / financiers every time they want to expand though. Quite a high risk strategy which will either result in fantastic profit levels in 2-3 years time or a messy demise in the next 12-18 months when the money runs out.
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I see that BA are also jumping on the Maxjet passengers by offering a discounted fare:
"British Airways is offering customers of the US based airline, MaxJet, booked to travel after December 24 2007, the opportunity to book Club World (business class) return tickets between London Heathrow and New York......"
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Zero value
the share price is down another 12% this morning as an adviser said the firm was in effect doomed in a damming brokers note.
this out this morning from Daniel Stewart
Likely to fail
· We are initiating coverage of Silverjet this morning with a share price target of zero on a 12 month view so the recommendation is a SELL. Our reason is that the business model doesn’t work, we can’t see that it ever will, and we expect the company will eventually run out of cash. Our forecast is for a pre-tax loss of £31m in the year to March 08, and about £27m the following year.
· The business case at the IPO was very simple - that you could operate a B767 on a London New York route for a round trip cost of about £67,000 so with a fare of about £999 return you only need to sell 65 of your 102 seats (a load factor of 63.7%) to break-even – anything beyond this level is profit. They were still using these figures when we met management in December and they repeated the claim to the Daily Telegraph last week.
· We reckon the claim just doesn’t stack up. For a start, it excludes advertising, marketing, depreciation, and all admin costs. These can add up to quite sizeable figures. Also, since the IPO the sterling price of jet fuel, their biggest cost, has gone up by about 16% - you need to sell 4 extra seats for every flight just to cover that cost. If you add it all up, you can easily arrive at a theoretical break-even point for the company of as much as 85%.
· In practise, things have been a lot worse. In the half year to September 2007, the scheduled airline lost £11.7m on turnover of £12.2m– despite achieving a load factor in the period of nearly 70%. So load factor was 6pc above their claimed break-even yet they still made a big loss. The problem was its operating costs – at £135,755 for each return flight – more than double the claim of £67,000 in the IPO document. When you ask the company about this, they say that they are now re-working the model.
· Current traffic levels are dire; load factor for Q3 was just 55.2% and now that we are in the real low point for UK airlines (Jan-Feb) Silverjet, like all the other airlines, has launched a sale with price cuts of 20%. Although the company raised £21m last month we reckon its H2 loss will consume about 84% of these proceeds.
Likely to fail
· We are initiating coverage of Silverjet this morning with a share price target of zero on a 12 month view so the recommendation is a SELL. Our reason is that the business model doesn’t work, we can’t see that it ever will, and we expect the company will eventually run out of cash. Our forecast is for a pre-tax loss of £31m in the year to March 08, and about £27m the following year.
· The business case at the IPO was very simple - that you could operate a B767 on a London New York route for a round trip cost of about £67,000 so with a fare of about £999 return you only need to sell 65 of your 102 seats (a load factor of 63.7%) to break-even – anything beyond this level is profit. They were still using these figures when we met management in December and they repeated the claim to the Daily Telegraph last week.
· We reckon the claim just doesn’t stack up. For a start, it excludes advertising, marketing, depreciation, and all admin costs. These can add up to quite sizeable figures. Also, since the IPO the sterling price of jet fuel, their biggest cost, has gone up by about 16% - you need to sell 4 extra seats for every flight just to cover that cost. If you add it all up, you can easily arrive at a theoretical break-even point for the company of as much as 85%.
· In practise, things have been a lot worse. In the half year to September 2007, the scheduled airline lost £11.7m on turnover of £12.2m– despite achieving a load factor in the period of nearly 70%. So load factor was 6pc above their claimed break-even yet they still made a big loss. The problem was its operating costs – at £135,755 for each return flight – more than double the claim of £67,000 in the IPO document. When you ask the company about this, they say that they are now re-working the model.
· Current traffic levels are dire; load factor for Q3 was just 55.2% and now that we are in the real low point for UK airlines (Jan-Feb) Silverjet, like all the other airlines, has launched a sale with price cuts of 20%. Although the company raised £21m last month we reckon its H2 loss will consume about 84% of these proceeds.
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Thanks befree
May I just ask a question (it's probably something obvious I've missed, I'm sure)?
The phrase that confuses me is "round-trip" - I take this to mean that it refers to a routing LTN-JFK-LTN: If this is so, then the total number of available seats is actually twice 102 i.e. 204 seats in total. This figure changes the math significantly, resulting in a figure much closer to the £135K mentioned later as being the actual costs.
I assume that the analyst/adviser really means one-way cost rather than round-trip. If this is the case, then might it not call into question the reliability of the quality of the brokers' comments?
May I just ask a question (it's probably something obvious I've missed, I'm sure)?
a round trip cost of about £67,000 so with a fare of about £999 return you only need to sell 65 of your 102 seats (a load factor of 63.7%) to break-even
I assume that the analyst/adviser really means one-way cost rather than round-trip. If this is the case, then might it not call into question the reliability of the quality of the brokers' comments?
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You can see the original comments about break even point in the Silverjet admission/IPO document when it listed. £65K was round trip cost and £999 was round trip fare. The analisyt has got things slightly wrong but the basic arguament is correct and ths stock has dropped more.
They have a range of fares and did hike prices to make the normal fare around £1099 return. They have also been discounting (at 20% currently) and offering lots of free seats to jurnos etc.
The other hit was the doubling of Airport departure tax (ADP) and they will get hit again by planned changed to the rules. The ADP is being charged at the lower rate at the moment as its their lowest class cabin. The change will add £40 to a return trip.
They have a range of fares and did hike prices to make the normal fare around £1099 return. They have also been discounting (at 20% currently) and offering lots of free seats to jurnos etc.
The other hit was the doubling of Airport departure tax (ADP) and they will get hit again by planned changed to the rules. The ADP is being charged at the lower rate at the moment as its their lowest class cabin. The change will add £40 to a return trip.
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Even with fuel going up by 16% the cost of operating the round-trip should not be any higher than a maximum of £80,000 ( I would probably put it closer to £75,000). There is no way that the roundtrip is £135,000 at the operating level. Now, it may be with all the non-operating cost has added a more than anticipated chunk to the cost line but I'd find it hard to believe that each pax is costing an additional £555 in everything else which is what is needed to get to £135,000 on a 53% load factor. I think the analyst has his figs wrong.
Perhaps he bought high and got his fingers burned?
Perhaps he bought high and got his fingers burned?
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What a load of crap!
Its crap like what Mr Stewart has published that makes me mad! It is not only scarmongering, but the facts he has quoted are so inaccurate it is laughable. No wonder the share price has fallen... people not in the know are probably very very nervous about there investiment now. Thanks Mr Stewart!!!
If you actually worked for the company... and spoke to our very open Management who keep us very well informed as to how the business is running both fanancially and operationally you would know that Silverjet is looking very rosey at the mo with strong ticket sales and great future plans etc.
People, please remember its our jobs your slagging off when you post this kind of garbage on here. Even if you do believe it to be true... have a thought to those who care deeply about there great little British Airline!
Its crap like what Mr Stewart has published that makes me mad! It is not only scarmongering, but the facts he has quoted are so inaccurate it is laughable. No wonder the share price has fallen... people not in the know are probably very very nervous about there investiment now. Thanks Mr Stewart!!!
If you actually worked for the company... and spoke to our very open Management who keep us very well informed as to how the business is running both fanancially and operationally you would know that Silverjet is looking very rosey at the mo with strong ticket sales and great future plans etc.
People, please remember its our jobs your slagging off when you post this kind of garbage on here. Even if you do believe it to be true... have a thought to those who care deeply about there great little British Airline!
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Mr Stewart calculations (~£135,000)are very out of data because they were taken of the accounts which cover the first 6 months of flying. The managements claim that the round trip costs are £65,000 are even more out of date as they were made when the airline first raised cash on the stock market.
The true operating cost (for the airline per return flight, not just the plane) is going to be somewhere between the two are far higher than income and will be for many years.
the Management need to have a reality check on what they are planning. Starting new routes takes vast amounts of cash while you build the load factor to break even. The only chance Silverjet could have had is to keep real and manage cash careful in case better times are ahead. Unfortunatly they would then have been unable to riase cash.
The true operating cost (for the airline per return flight, not just the plane) is going to be somewhere between the two are far higher than income and will be for many years.
the Management need to have a reality check on what they are planning. Starting new routes takes vast amounts of cash while you build the load factor to break even. The only chance Silverjet could have had is to keep real and manage cash careful in case better times are ahead. Unfortunatly they would then have been unable to riase cash.
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Some questions regarding Y7:
Did silverjet ever consider using 757s (ex-Flyjet) with same product and 50ish seats for start-up?
What other UK airports have they considered operating from?
What impact if any might BA T5 have on likes of silverjet?
Is the airline still carbon neutral?
Did silverjet ever consider using 757s (ex-Flyjet) with same product and 50ish seats for start-up?
What other UK airports have they considered operating from?
What impact if any might BA T5 have on likes of silverjet?
Is the airline still carbon neutral?
Last edited by Heffer; 14th Jan 2008 at 17:34. Reason: Simplified posting
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Silverjet in Good Shape
The problem with these sort of forums is the lack of correct factual information and the proliferation of a hope they go bust attitudes.
Silverjet is doing just fine with an oustanding product. Over 5000 tickets were sold just last week with many many return customers.
The stuff being produced on here and by D.Stewart is incorrect rubbish. More to follow but in the mean time this is how Daniel Stewart are doing !!
Daniel Stewart confident of future despite posting full year loss
Monday, August 13, 2007, 09:18 AM
Full year results for the year ended 31 March 2007 from corporate advisory and stock brokering group Daniel Stewart made grim reading this morning. The company posted a pre tax loss of £3.735 million before exceptional items (2006: Profit £3.02 million) on revenues of £7.55 million (2006: £8.19 million).
Daniel Stewart was considerably damaged by US legislation in 2006 to online gambling operators, as it had two clients in the sector, and had additional clients in the pipeline. The poor result was also compounded by an internal restructuring conducted in the second half of 2006 which resulted in a £1.7 million one off cost incurred through bolstering staff levels and the transferring of shares to the Employee Benefit Trust (£1.6 million).
Peter Shea, Daniel Stewart's Chief Executive added: "The year just completed has been one of change for the Company. We have successfully created a high quality team of market professionals delivering an upgraded product to both our corporate and institutional clients. The new financial year has commenced well with a return to profitability and we look forward to the balance of the year with confidence".
Shares in Daniel Stewart slipped 10% to 14.5 pence.
Silverjet is doing just fine with an oustanding product. Over 5000 tickets were sold just last week with many many return customers.
The stuff being produced on here and by D.Stewart is incorrect rubbish. More to follow but in the mean time this is how Daniel Stewart are doing !!
Daniel Stewart confident of future despite posting full year loss
Monday, August 13, 2007, 09:18 AM
Full year results for the year ended 31 March 2007 from corporate advisory and stock brokering group Daniel Stewart made grim reading this morning. The company posted a pre tax loss of £3.735 million before exceptional items (2006: Profit £3.02 million) on revenues of £7.55 million (2006: £8.19 million).
Daniel Stewart was considerably damaged by US legislation in 2006 to online gambling operators, as it had two clients in the sector, and had additional clients in the pipeline. The poor result was also compounded by an internal restructuring conducted in the second half of 2006 which resulted in a £1.7 million one off cost incurred through bolstering staff levels and the transferring of shares to the Employee Benefit Trust (£1.6 million).
Peter Shea, Daniel Stewart's Chief Executive added: "The year just completed has been one of change for the Company. We have successfully created a high quality team of market professionals delivering an upgraded product to both our corporate and institutional clients. The new financial year has commenced well with a return to profitability and we look forward to the balance of the year with confidence".
Shares in Daniel Stewart slipped 10% to 14.5 pence.
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Get real boys
The word on the street is that Silverjet has about enough cash to fly for another month, then that's it, no more money. This is not word from the stock market, but this is the rumour doing the rounds among the aviation professionals inside the industry and it comes from a VERY good source.
You guys need to get real, all of this hyperbole about how wonderful everything is cannot disguise what is coming. Wake up guys and smell the coffee, the end is in sight, end of story. It was a nice dream, but that's all it was, a dream. It's time to wake up now.
I agree with 8che, facts are important and the plain fact here is the business model was flawed from the outset and poorly executed at many levels.
You guys need to get real, all of this hyperbole about how wonderful everything is cannot disguise what is coming. Wake up guys and smell the coffee, the end is in sight, end of story. It was a nice dream, but that's all it was, a dream. It's time to wake up now.
I agree with 8che, facts are important and the plain fact here is the business model was flawed from the outset and poorly executed at many levels.
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Silverjet doing fine
The word on the street is that Silverjet has about enough cash to fly for another month
Im sure thats what our competition wants you to think so there staff dont apply for a job at Silverjet!hmmmm let me see... Silverjet sold over 5000 tickets last week. Even at the lowest fare of £879 inc tax (£79) thats a sales figure of over...
...hang on.... umm £879 - tax £79 = 800 x 5000 = er, umm...
£4000000. Yep thats £4 MILLION!!! In one week! although Im sure its alot more than that with yeild management.
Not bad for a 3 aircraft airline with only 100 seats per Aircraft.
Im sure I'll still be Silverjetting to New York and Dubai come the Summer!
Right thats all from me for a while. Ive had enough bullcrap on this website today to do me until the cows come home. I look forward to flying all you nice Silverjet set to NYC and Dubai and our next destination TBC in the summer.
ops!
Last edited by Ops! I did it again; 14th Jan 2008 at 18:07.
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I would just like to add that Silverjet don't fly to JFK, they fly to EWR.
On reading a post earlier, it will not make any odds when BA start using T5 as l read on pprune that long haul BA, along with the B757 fleet stays at T4, if the post was correct.
On reading a post earlier, it will not make any odds when BA start using T5 as l read on pprune that long haul BA, along with the B757 fleet stays at T4, if the post was correct.
