SilverJet (Merged 30/05)
Paxing All Over The World
I have not travelled with them but the trip report from MJ sounds right for the price. They are NOT a full club service and the benefits of easier access for those who live near the field will outweigh the reduction in service. If opportunity presented, I would certainly consider them, bearing in mind that they are half way between Premium Economy and full Biz.
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Whats the agenda Capability, that article was posted over 2 months ago. Here is one from one month ago.
First, let’s take a look at the Reuben Brothers’ decision not to take shares in the airline. The two options open to them on 11 February were exchanging their £10m for 18.3 million shares, then priced at 24p, or carrying on with the loan until December 2009, when it is repayable at an attractive rate of LIBOR plus 2%. Converting to shares would have instantly valued their investment at £4.4m. Yes, there’s the potential future upside but it’s not something most share dealers would agree to do easily.
I think the most significant thing to come out of it is that the brothers have not asked for repayment of their loan. If they were truly worried about its future, they would have foreclosed. Indeed, at the time of the decision, the brothers said: “We continue to believe the company has a sound business model and excellent prospects for the future to become a major player in the global aviation business.”
Secondly, let’s take a look at the competition from Eos. I personally think that the passengers that the two airlines attract are very different. Eos is essentially a traditional first class product which is called business class only to make companies feel comfortable about sending their business travellers on it. Silverjet, on the other hand, is a business class product through and through but at far lower fares than the traditional carriers.
Most business travellers I have spoken to about Silverjet cannot rate it highly enough. There’s the odd grumble about having to go to Luton but the service, both on the ground and on the plane, are impeccable.
Some people may be concerned about the airline’s viability. Despite the share price, the airline must have plenty of cash, amassed from the loan, a £12m share issue and a successful January sale. I suspect a certain amount of mischief-making in the current wave of rumours about the airline but I personally think there’s little to worry about at the moment. I could be proven wrong – and I hope I am not because Silverjet brings much needed choice to the business travel sector – but I believe that the airline has a rosy future.
First, let’s take a look at the Reuben Brothers’ decision not to take shares in the airline. The two options open to them on 11 February were exchanging their £10m for 18.3 million shares, then priced at 24p, or carrying on with the loan until December 2009, when it is repayable at an attractive rate of LIBOR plus 2%. Converting to shares would have instantly valued their investment at £4.4m. Yes, there’s the potential future upside but it’s not something most share dealers would agree to do easily.
I think the most significant thing to come out of it is that the brothers have not asked for repayment of their loan. If they were truly worried about its future, they would have foreclosed. Indeed, at the time of the decision, the brothers said: “We continue to believe the company has a sound business model and excellent prospects for the future to become a major player in the global aviation business.”
Secondly, let’s take a look at the competition from Eos. I personally think that the passengers that the two airlines attract are very different. Eos is essentially a traditional first class product which is called business class only to make companies feel comfortable about sending their business travellers on it. Silverjet, on the other hand, is a business class product through and through but at far lower fares than the traditional carriers.
Most business travellers I have spoken to about Silverjet cannot rate it highly enough. There’s the odd grumble about having to go to Luton but the service, both on the ground and on the plane, are impeccable.
Some people may be concerned about the airline’s viability. Despite the share price, the airline must have plenty of cash, amassed from the loan, a £12m share issue and a successful January sale. I suspect a certain amount of mischief-making in the current wave of rumours about the airline but I personally think there’s little to worry about at the moment. I could be proven wrong – and I hope I am not because Silverjet brings much needed choice to the business travel sector – but I believe that the airline has a rosy future.
CH3CH2OH
Capability, 2 posts only on Prune, both negative about SJ, is your nom de plume a double nom de plume for another SJ naysayer?
Just back today from a trip to DXB with SJ and must say was much impressed with the whole proceedings, a very pleasant way to travel, the airport experience is a breath of fresh air at both ends compared to the usual scrummage and the onboard experience very good.
I for one hope they do well and will happily recommend them to anyone.
Just back today from a trip to DXB with SJ and must say was much impressed with the whole proceedings, a very pleasant way to travel, the airport experience is a breath of fresh air at both ends compared to the usual scrummage and the onboard experience very good.
I for one hope they do well and will happily recommend them to anyone.
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Even easyJet posted a PROFIT warning this week, and their shares slumped accordingly.
Their CEO gave warning that if oil persists at over $1000 a tonne, then profits will be hit to the tune of £45 million this year.
So, are Silverjet immune to the sky high oil price?
The company is burning cash. It will run out. Then, it's either refinance, or face the music.
Their CEO gave warning that if oil persists at over $1000 a tonne, then profits will be hit to the tune of £45 million this year.
So, are Silverjet immune to the sky high oil price?
The company is burning cash. It will run out. Then, it's either refinance, or face the music.
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I don't have a preference, but it is a simple FACT cabincrewe.
The facts are these:
Banks won't even lend money to each other, let alone airlines at the minute.
Banks are struggling to raise money to lend to individuals for even a mortgage currently.
Banks are going to look at airlines and laugh currently.
High oil price.
Open skies increased competition.
Anti Aviation lobby.
Would you lend an airline money? Would you invest in shares that have lost 85% of their value when the directors come begging you for hard earned cash via an emergency rights issue?
Come on. Face it. Silverjet and many many others are going to struggle this year.
The facts are these:
Banks won't even lend money to each other, let alone airlines at the minute.
Banks are struggling to raise money to lend to individuals for even a mortgage currently.
Banks are going to look at airlines and laugh currently.
High oil price.
Open skies increased competition.
Anti Aviation lobby.
Would you lend an airline money? Would you invest in shares that have lost 85% of their value when the directors come begging you for hard earned cash via an emergency rights issue?
Come on. Face it. Silverjet and many many others are going to struggle this year.
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Yeah I agree totally. You've just got to look at BA and Virgin panicing over SJ and slashing their prices. Unrealistic prices that they won't be able to sustain though. It's good to see competition on these routes. Wonder how BA/Virgin will cope?
As with regards to SJ they'll be invested in heavily soon so I wouldn't worry about them.
CFM
As with regards to SJ they'll be invested in heavily soon so I wouldn't worry about them.
CFM
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I don't think Virgin or BA really worry about SJ. That is purely because SJ aren't really a threat to them. They operate on one Transatlantic route, Virgin and BA have many other Transatlantic routes.
The reason for fares falling on the Atlantic is because of excess capacity (admittedly which SJ have contributed to) and of course the advent of Openskies in a weeks time. As for low tickets on the Dubai route? Well, that is more likely down to the fact that Emirates are so dominant.
Don't kid yourself that VS or BA are hiding from SJ. They couldn't give a stuff about them. Both BA and VS have more than enough troubles of their own. However, they have the benefit of cross subsidy from profitable routes and far, far deeper pockets than SJ will EVER have.
I look forward to seeing the share price rally on the back of the big investor, but I am still sceptical that SJ will make money before the crunch comes. The whole economic world has changed since last summer. It is a VERY tough place to do any kind of business. Let alone airline business.
The reason for fares falling on the Atlantic is because of excess capacity (admittedly which SJ have contributed to) and of course the advent of Openskies in a weeks time. As for low tickets on the Dubai route? Well, that is more likely down to the fact that Emirates are so dominant.
Don't kid yourself that VS or BA are hiding from SJ. They couldn't give a stuff about them. Both BA and VS have more than enough troubles of their own. However, they have the benefit of cross subsidy from profitable routes and far, far deeper pockets than SJ will EVER have.
I look forward to seeing the share price rally on the back of the big investor, but I am still sceptical that SJ will make money before the crunch comes. The whole economic world has changed since last summer. It is a VERY tough place to do any kind of business. Let alone airline business.
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stansdead,
Hmm I see what you mean about having their own troubles.
I believe that the investor (s) actually do have bigger pockets than both BA and virgin combined. We shall see. Here's hoping.....
CFM
Hmm I see what you mean about having their own troubles.
I believe that the investor (s) actually do have bigger pockets than both BA and virgin combined. We shall see. Here's hoping.....
CFM
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3rd route
I guess the third route must be well in the planning. The middle east would seem the place to fly the 4th plane. Well timed planes cound link into the new york flights. When are new staff coming on board?
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Looks as if SJ product receiving rave reviews from prominant sources
http://www.abtn.co.uk/Flying_at_the_Front_End_Silverjet
The doom and gloom can be overcome.....
Good luck to them I say and cant wait to try them.
http://www.abtn.co.uk/Flying_at_the_Front_End_Silverjet
The doom and gloom can be overcome.....
Good luck to them I say and cant wait to try them.
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Is anyone else detecting a discernable spin being placed upon the last few posts here? Anyone here who questions the Silverjet business model receives the same treatment as the CEO dishes out to City analysts - if you question what they're doing, you "don't understand the business model". Common theme coming through.....
Silverjet is still very much on trial and has yet to show any form of profit, let alone one which means it is sustainable without more cash being pumped in. Reviews all say that the service is great and I've heard that it is although not tried it myself. That does't automatically translate to making a profit. From what I hear, the CEO has recently spent a lot of time in the Middle East trying to tie a deal together for more money but to no avail.
Postings to suggest that a big investor is imminent merely serves to underline a complete lack of corporate governance. Any news like that should be released to shareholders well before being leaked via a bulletin board even if the markets are closed for a long weekend.
Silverjet is still very much on trial and has yet to show any form of profit, let alone one which means it is sustainable without more cash being pumped in. Reviews all say that the service is great and I've heard that it is although not tried it myself. That does't automatically translate to making a profit. From what I hear, the CEO has recently spent a lot of time in the Middle East trying to tie a deal together for more money but to no avail.
Postings to suggest that a big investor is imminent merely serves to underline a complete lack of corporate governance. Any news like that should be released to shareholders well before being leaked via a bulletin board even if the markets are closed for a long weekend.
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Thanks for the post CabinCrewe.
Having read it, I can't follow the logic that BA and Virgin aren't the least bit worried about Silverjet. They certainly should be!
I can remember the panic and dirty dealing that BA engaged with against Laker...and that was a small operation compared with their own.
Having read it, I can't follow the logic that BA and Virgin aren't the least bit worried about Silverjet. They certainly should be!
I can remember the panic and dirty dealing that BA engaged with against Laker...and that was a small operation compared with their own.
Paxing All Over The World
Lou Scannon
BA and others reacted badly to Laker as it was the first assault on their profits - even though he was only going for the economy pax. They paid a high price for their actions.
BA attacked Virgin Atlantic as it was a very direct attack on their C and F pax. They again paid a high price for their actions.
So, do not expect ANYONE to attempt to take SJ pax through anything other than legit advertising, good service and value for money.
Should they be worried? Probably not. The capacity that SJ and the others are providing is tiny and specific. The corporates are unlikely to move away from the big boys due to discounts and alternative routing if a particular rotation is canx. Whilst SJ might be taking some of their PE/WTP pax, they will not take any action which could land them up in court.
The Open Skies issue has all the trouble that BA/VS need right now and, for that, SJ and the others can give thanks.
Having read it, I can't follow the logic that BA and Virgin aren't the least bit worried about Silverjet. They certainly should be!
I can remember the panic and dirty dealing that BA engaged with against Laker...and that was a small operation compared with their own.
I can remember the panic and dirty dealing that BA engaged with against Laker...and that was a small operation compared with their own.
BA attacked Virgin Atlantic as it was a very direct attack on their C and F pax. They again paid a high price for their actions.
So, do not expect ANYONE to attempt to take SJ pax through anything other than legit advertising, good service and value for money.
Should they be worried? Probably not. The capacity that SJ and the others are providing is tiny and specific. The corporates are unlikely to move away from the big boys due to discounts and alternative routing if a particular rotation is canx. Whilst SJ might be taking some of their PE/WTP pax, they will not take any action which could land them up in court.
The Open Skies issue has all the trouble that BA/VS need right now and, for that, SJ and the others can give thanks.
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Two points PAXboy:
The pressure was put on Laker when he started his first class "Regency" service as they could see it undercutting their products. They seemed, until then, happy enough with his tourist class ambitions.
Secondly, it wasn't the size of the Laker operation that frightened them, it was the possiblity that it would be a success and grow to the point that it would take their first class passengers away.
Having said that, I take your point that the greater threat at present is that with open skies, a lot more airlines are competing for the same customers.
However, Silverjet can make a profit at just over £600 a sector but they all seem to need more like £2,000 (when not forced to discount heavily to fill their seats).
The pressure was put on Laker when he started his first class "Regency" service as they could see it undercutting their products. They seemed, until then, happy enough with his tourist class ambitions.
Secondly, it wasn't the size of the Laker operation that frightened them, it was the possiblity that it would be a success and grow to the point that it would take their first class passengers away.
Having said that, I take your point that the greater threat at present is that with open skies, a lot more airlines are competing for the same customers.
However, Silverjet can make a profit at just over £600 a sector but they all seem to need more like £2,000 (when not forced to discount heavily to fill their seats).