SilverJet (Merged 30/05)
I'm not sure about the flexibility issue being cited
The less deeper pockets has affected most startups and their downfall.
The customer base may be the factor that sets the crossover point between shallow pockets and growth to profitablity.
From what I read the idea behind these premi service guys would have worked if the cutomer base expanded as fast as their reputation for good value for service. Unfortunately the crossover economics was altered by the rise in fuel prices.
I expect to see them come back again with the same business model after the industry reaction to increased fuel costs levels out in profitability
The less deeper pockets has affected most startups and their downfall.
The customer base may be the factor that sets the crossover point between shallow pockets and growth to profitablity.
From what I read the idea behind these premi service guys would have worked if the cutomer base expanded as fast as their reputation for good value for service. Unfortunately the crossover economics was altered by the rise in fuel prices.
I expect to see them come back again with the same business model after the industry reaction to increased fuel costs levels out in profitability
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As 'slim and shady' states it is OK for the established airlines to fine tune services but new entrants forget it. I doubt they will be back particularly when the US and EU majors are allowed to merge and set the fares. If that is not enough fuel will be another stumbling block. Despite denials at BA it will be no suprise to see a number of aircraft stored this winter, they will not be the only ones.
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I`ve said before similar to my previous posting before bye bye Maxjet and co. Silverjet could have pulled in "easy" cash in the better times with a 2 class product, whether the business and economy product or a premium economy and economy product.
I am sure that, even if they do not survive in their current form, the SJ brand and concept will somehow survive. It is extremely focussed on its core market and provides a great product.
If any survive, they should.
(PS - £499 is a lot, when you can pop down the road to fly AA or BA for £300)
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OK well £499 was a quick example, and know that fares are somewhat lower, depending when how and who with.
I can`t see it being a confused strategy. Why? BA VS Zoom manage it.
So business pax check in at their own terminal, economy in main terminal.
It maybe a great product and very focused, but its bleeding dosh from every pore in its body, and no doubt other companies too but this one can`t raise cash at this moment.
I can`t see it being a confused strategy. Why? BA VS Zoom manage it.
So business pax check in at their own terminal, economy in main terminal.
It maybe a great product and very focused, but its bleeding dosh from every pore in its body, and no doubt other companies too but this one can`t raise cash at this moment.
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The "all business-class" model is a sound one and can succeed, but all the failures can be put down to 2 simple factors:
1. Wrong operating base. Crazy to consider STN or LTN when LHR is so close. They should have gone for EDI or BRS
2. Wrong aircraft. The ideal aircraft is a B737 or A319 with around 60+ business seats.
How anyone with high seat-costs can hope to compete with LHR just down the road - and with zillions of frequencies - is suicide.
1. Wrong operating base. Crazy to consider STN or LTN when LHR is so close. They should have gone for EDI or BRS
2. Wrong aircraft. The ideal aircraft is a B737 or A319 with around 60+ business seats.
How anyone with high seat-costs can hope to compete with LHR just down the road - and with zillions of frequencies - is suicide.
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The "all business-class" model is a sound one and can succeed, but all the failures can be put down to 2 simple factors:
1. Wrong operating base. Crazy to consider STN or LTN when LHR is so close. They should have gone for EDI or BRS
2. Wrong aircraft. The ideal aircraft is a B737 or A319 with around 60+ business seats.
How anyone with high seat-costs can hope to compete with LHR just down the road - and with zillions of frequencies - is suicide.
1. Wrong operating base. Crazy to consider STN or LTN when LHR is so close. They should have gone for EDI or BRS
2. Wrong aircraft. The ideal aircraft is a B737 or A319 with around 60+ business seats.
How anyone with high seat-costs can hope to compete with LHR just down the road - and with zillions of frequencies - is suicide.
Bollocks. Edinburgh and Bristol have a mere fraction of the London market. A niche carrier is a risk in itself, a niche carrier in a niche city is nuts. Silverjet managed to attract the customers they did in good numbers to avoid the Heathrow hassle, that business rightly hates. The oil price is going to hurt them as it hurts everyone, but they are not an established carrier with cash reserves and their business model is unproven. To suggest you could get enough premium businss travellers from Bristol just shows a complete lack of business savvy or depth of knowledge. That's the kind of rubbish one expects on airliners.net. A lot of people stand to lose their jobs here, perhaps the armchair CEO's could keep the prevarication down a notch.
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To underline why the models of these types of carriers are now unviable, I've taken the following from Business Times and adjusted to allow for more recent increases (from $120 oil to $131)
A Boeing 767 or Airbus A330 will burn 12,800 gallons of jet fuel during the 3,180 nautical mile journey from London's Heathrow to New York. On return, the average is 10,800 gallons due to tailwinds. The outward leg of a transatlantic flight now costs approx $48,000 and $88,000 for a return journey
So even if the 100 seat aircraft was 70% full on every single flight the passenger would have to hand over £628 just to pay his/her chunk of the fuel.
A Boeing 767 or Airbus A330 will burn 12,800 gallons of jet fuel during the 3,180 nautical mile journey from London's Heathrow to New York. On return, the average is 10,800 gallons due to tailwinds. The outward leg of a transatlantic flight now costs approx $48,000 and $88,000 for a return journey
So even if the 100 seat aircraft was 70% full on every single flight the passenger would have to hand over £628 just to pay his/her chunk of the fuel.
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Two UK Biz-class airlines go to the wall and a third one is now in trouble, all in a few weeks. This tells the market something. This type of operation is destined to failure, sadly, in the present climate. In fact airlines everywhere are all on the verge of having big problems financially.
Yet, some idiot at British Airways thinks that starting the Openskies operation in June is still a good idea. I really hope that I am proven wrong in a years time, but I fear that many millions will have been spent and lost before it also goes to the wall. And then we have the other ridiculous planned BA operation to JFK from LCY (via SNN) with a lower standard of business class service in a tiddly 318. What next!??
Yet, some idiot at British Airways thinks that starting the Openskies operation in June is still a good idea. I really hope that I am proven wrong in a years time, but I fear that many millions will have been spent and lost before it also goes to the wall. And then we have the other ridiculous planned BA operation to JFK from LCY (via SNN) with a lower standard of business class service in a tiddly 318. What next!??
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Yet, some idiot at British Airways thinks that starting the Openskies operation in June is still a good idea.
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Yes, but you assume they that it doesn't carry cargo...you don't work for Daniel Stewart do you?
To explain why MAXjet was confusing - it went for "business class", but it wasn't really business class (tatty product, not flat seats) so was massacred by those providing the real product.
BA and Virgin have a premium product at a premium price - the best product there is, and people are not confused as to what is being offered.
Zoom is low-cost and very clear that it is low-cost. People are not confused about what is offered.
Silverjet have a strong top-end business class product targetted at the business market, and business travellers when they go on holiday. No confusion there.
eos's error was perhaps going for a top-end, closer-to-first class product, at a not dissimilar price than BA, and located further from London than business passengers in London tend to live.
To explain why MAXjet was confusing - it went for "business class", but it wasn't really business class (tatty product, not flat seats) so was massacred by those providing the real product.
BA and Virgin have a premium product at a premium price - the best product there is, and people are not confused as to what is being offered.
Zoom is low-cost and very clear that it is low-cost. People are not confused about what is offered.
Silverjet have a strong top-end business class product targetted at the business market, and business travellers when they go on holiday. No confusion there.
eos's error was perhaps going for a top-end, closer-to-first class product, at a not dissimilar price than BA, and located further from London than business passengers in London tend to live.
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eos's error was perhaps going for a top-end, closer-to-first class product, at a not dissimilar price than BA, and located further from London than business passengers in London tend to live.
For what its worth i disagree re above.
Eos model was sound but let down by fuel, and the investment market in US drying up.
It was the right to go from STN (cheaper and provincial yes) but ideal catchment for City folk who would pay for a great seat/bed at fares less than BA etc.
Silverjet model would also work if fuel was at last years highs or lower and perhaps they spent a little more wisely.
Though in these difficult times the only model that could work (from a start up phase) would be two class - to help pay for all that fuel burn and keep the cash flow coming in.
#good luck to all those staff at SJ!
For what its worth i disagree re above.
Eos model was sound but let down by fuel, and the investment market in US drying up.
It was the right to go from STN (cheaper and provincial yes) but ideal catchment for City folk who would pay for a great seat/bed at fares less than BA etc.
Silverjet model would also work if fuel was at last years highs or lower and perhaps they spent a little more wisely.
Though in these difficult times the only model that could work (from a start up phase) would be two class - to help pay for all that fuel burn and keep the cash flow coming in.
#good luck to all those staff at SJ!
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Always sad news, even when you don't operate for the carrier concerned. It isn't all over yet, but there are jobs for B757 drivers at the moment, so the boys and girls might be advised to keep an ear to the ground. Astraeus are getting another B757 next month judging by the registrations 'reserved' listing.
I was planning a Dubai trip on Sj. I seem to have more friends living in the sand pit than in the U.K.
I was planning a Dubai trip on Sj. I seem to have more friends living in the sand pit than in the U.K.
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"Flexibility is the key to air power" - Day One. Royal Air Force College Cranwell. Principle applies to both military and civvy operations.
With oil at $130 to $135 a barrel, it's hardly surprising that many airlines are slowly bleeding to death and as always the weakest go first.
The product was absolutely spot on - it's just 'events' that have created this situation.
As for your quote - please remember, in the cosseted world of service flying, it's the taxpayer that picks up the bill and there aren't any shareholders or banks constantly breathing down your neck. If there were, you wouldn't see gas-guzzling L-1011s and VC-10s still flying around....
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Kotakota - yes going direct with Oman Air from LGW was an option but the product (leased Hifly A310, and formerly an ancient Malev 767) can't compete with QR's A346 J comfort, especially as QR ex LHR was cheaper! I'll hang on until Oman Air get their A330's and try them then. Cheers for the suggestion though.
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I wouldn't write Openskies off too soon. They have had time to see the mistakes of others. They also are 3 class albeit with only 82 seats but a cpability of quickly changing config. I have never flown Silverjet but certainly like the concept. I hope they survive else we are left with 'world traveller plus' in the UK 