SilverJet (Merged 30/05)
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oops i did it again, i hope you are right. it is great to hear from someone enjoying thier job with a growing airline.
when eujet started, we all had high hopes, but spending money and using unreliable a/c is a risk, i know eujet were a lowcost airline but the warning signs are there. good luck. i really mean it
when eujet started, we all had high hopes, but spending money and using unreliable a/c is a risk, i know eujet were a lowcost airline but the warning signs are there. good luck. i really mean it
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Looking at various online financial websites, they have the airline with a forcasted loss of £28m, against rev £56m, for the year ended 31/3/08, and break-even, rev £150m+, to 31/3/09. Really.....we all know how things can change
Last edited by Powerjet1; 26th Nov 2007 at 20:03.
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I am no financial expert but how can Silverjet make the losses look like Flyjets? Did FJE actually make a profit when they were operating? I know they did not have the best reputation and people began to associate them with Silverjet, which can't have impressed those in LTN, but FJE seemed like a decent small outfit when things went right? Their aircraft was certainly well used, having been involved in the tsunami and flown on a worldwide AOC?
Just curious!! If Silverjet want to succeed surely any income would have been welcome? Did Silverjet allow any of the FJE crew to transfer or did they totally want to distance themselves from the charter boys?
Just curious!! If Silverjet want to succeed surely any income would have been welcome? Did Silverjet allow any of the FJE crew to transfer or did they totally want to distance themselves from the charter boys?
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Just a quick input into the debate on SilverJet's financials. I haven't had a look at the Financial Statements but don't get too interested in the profit/loss number.
Profit and loss is quite simply an accounting thing and is really quite meaningless. News reports (and banks) take far too much interest in it as it is relatively easy to work out and people think they know what it means.
The number that needs to be looked at (and sometimes estimated) is in the cash flow and is the net cash inflow from continuing operations, interest received, interest payable and lease finance payable. When going through you need to ignore asset purchase and new finance arrangements.
If this is negative, and remains negative on an ongoing basis, then the company is likely to not succeed. You can make a large loss regularly and still survive provided that this number remains positive. The only thing you can't do is pay dividends to your shareholders.
Profit and loss is quite simply an accounting thing and is really quite meaningless. News reports (and banks) take far too much interest in it as it is relatively easy to work out and people think they know what it means.
The number that needs to be looked at (and sometimes estimated) is in the cash flow and is the net cash inflow from continuing operations, interest received, interest payable and lease finance payable. When going through you need to ignore asset purchase and new finance arrangements.
If this is negative, and remains negative on an ongoing basis, then the company is likely to not succeed. You can make a large loss regularly and still survive provided that this number remains positive. The only thing you can't do is pay dividends to your shareholders.
Last edited by AeroAccountant; 27th Nov 2007 at 05:32.
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AeroAccountant
It's one thing for news reporters to take too much interest in the P & L figures but surely more concerning that the banks do???
I would hope that they as investors, above others should know what they are looking at?
If they do put their faith in these (apparently less meaningful) figures, will the more important figures that you point out get borne in mind & if not does that bode less well for airlines in the position you outline regardless of their potential future?
Hope that makes sense!!
Incidentally - no axe to grind here & hope Silverjet go from strength to strength. Just intrigued by the economics of all this!
It's one thing for news reporters to take too much interest in the P & L figures but surely more concerning that the banks do???
I would hope that they as investors, above others should know what they are looking at?
If they do put their faith in these (apparently less meaningful) figures, will the more important figures that you point out get borne in mind & if not does that bode less well for airlines in the position you outline regardless of their potential future?
Hope that makes sense!!
Incidentally - no axe to grind here & hope Silverjet go from strength to strength. Just intrigued by the economics of all this!
commit, i think the point aero accountant is trying to make is that companies go out of business because they run out of funds, rather than run up losses. both profitable and loss making businesses can run out of funds.
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Profit and loss is quite simply an accounting thing
Join Date: Feb 2007
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The question that perhaps a lot of people want an answer to is have Silverjet
spent a lot of money that will only come in this years books or is it something that will go on for a long time? Because if this a short term position with a lot of monies going out it can be sustainable but if not it can`t because I thought loads were quite good and there is a limit to how many pax can be carried per flight and therefore how much income there is
I`m not an accountant and I`m sure it shows but I do find it interesting.Years ago when both Pan Am and TWA were going from memory they didn`t make a profit for XX years and in-fact lost vast amounts and it always made me wonder how they could continue.
Ian
spent a lot of money that will only come in this years books or is it something that will go on for a long time? Because if this a short term position with a lot of monies going out it can be sustainable but if not it can`t because I thought loads were quite good and there is a limit to how many pax can be carried per flight and therefore how much income there is
I`m not an accountant and I`m sure it shows but I do find it interesting.Years ago when both Pan Am and TWA were going from memory they didn`t make a profit for XX years and in-fact lost vast amounts and it always made me wonder how they could continue.
Ian
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Why has todays flight from Dubai ended up at Brimingham?
Y70254 Dubai (DXB) to London Luton (LTN)
Departure: Scheduled: 10:30 Tue 27 Nov 2007
Actual: 10:30
Arrival: Scheduled: 14:45 Tue 27 Nov 2007
Estimated: 15:23
Landed: 16:05
FLIGHT HAS DIVERTED TO BIRMINGHAM. PLEASE CALL OUR CONTACT CENTRE 08448 550 111
Y70254 Dubai (DXB) to London Luton (LTN)
Departure: Scheduled: 10:30 Tue 27 Nov 2007
Actual: 10:30
Arrival: Scheduled: 14:45 Tue 27 Nov 2007
Estimated: 15:23
Landed: 16:05
FLIGHT HAS DIVERTED TO BIRMINGHAM. PLEASE CALL OUR CONTACT CENTRE 08448 550 111
Join Date: Jun 2006
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The share price appears to have been cleared to descend rapidly, perhaps it will pass through level 60 (pence that is!).
The share price drop today looks like it was driven by a fairly large shareholder dumping stock, over 2m shares traded at the same fixed price (60p). Perhaps an intstitutional investor can't face the prospect of losing all its money.
Anyone out there know what happens to the recently announced placing of shares if the share price falls below the placing price of 60p? I can't imagine an investor wanting to buy 55p shares for 60p. Do they pull out of the deal or simply take on more shares - diluting the value for other existing shareholders?
Keep on flying!
Saxon Ops
The share price drop today looks like it was driven by a fairly large shareholder dumping stock, over 2m shares traded at the same fixed price (60p). Perhaps an intstitutional investor can't face the prospect of losing all its money.
Anyone out there know what happens to the recently announced placing of shares if the share price falls below the placing price of 60p? I can't imagine an investor wanting to buy 55p shares for 60p. Do they pull out of the deal or simply take on more shares - diluting the value for other existing shareholders?
Keep on flying!
Saxon Ops
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The share placement will be underwriten by a broker or bank who will have to take the shares at 60p if not enough fools come forward. They will have some get outs that may apply.
The over 2 million shares traded could be just half that amount as every buy and sell is logged somethings get double counted.
The over 2 million shares traded could be just half that amount as every buy and sell is logged somethings get double counted.
"The Placing Agreement is also terminable in certain circumstances up until the
time of Admission, including, inter alia, for a material breach of the Company's
obligations under the Placing Agreement, for a material breach of a warranty
contained in the Placing Agreement, or in the event of force majeure or a
material adverse change in the financial condition of the Company. The placing Agreement contains various warranties given by the Company with respect to the business of the Group and certain matters connected with the Placing. In addition, the Company has given indemnities to Arden Partners and Kaupthing in connection with the Placing and the performance by Arden Partners and Kaupthing of services in relation to the Placing."
time of Admission, including, inter alia, for a material breach of the Company's
obligations under the Placing Agreement, for a material breach of a warranty
contained in the Placing Agreement, or in the event of force majeure or a
material adverse change in the financial condition of the Company. The placing Agreement contains various warranties given by the Company with respect to the business of the Group and certain matters connected with the Placing. In addition, the Company has given indemnities to Arden Partners and Kaupthing in connection with the Placing and the performance by Arden Partners and Kaupthing of services in relation to the Placing."
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Nobody seems to have commented on the fact that the Reuben Brothers (net worth £bns) have taken a stake in Silverjet as part of the fundraising. Guess backers with deep pockets should help fund their growth as well as potentially give them opportunities to take SilverJet and use it to help develop some of their other aviation assets......business class from Oxford anyone??
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Bloomberg article...
Silverjet May Buy Boeing, Airbus Planes as Reubens Take Stake
Nov. 30 (Bloomberg) -- Silverjet Plc, the business-class-only
airline that started flights in January, may purchase new widebody
planes from Boeing Co. or Airbus SAS after the billionaire Reuben
brothers agreed to invest in the company.
Silverjet may buy Boeing's 787 Dreamliner or the rival A350
from Airbus, Chief Executive Officer Lawrence Hunt said in an
interview. It will also look at the older Airbus A330 or add more
Boeing 767s to the three that make up its fleet now.
David and Simon Reuben agreed to loan Silverjet 10 million
pounds ($20.6 million), convertible into 18.3 million shares by
Feb. 11, the Luton, England-based carrier said a week ago. The
brothers have a net worth of $4.5 billion, according to Forbes
magazine. With assets including Oxford Airport, 40 miles northwest
of London, their involvement will reassure the planemakers of
Silverjet's creditworthiness, Hunt said.
Silverjet May Buy Boeing, Airbus Planes as Reubens Take Stake
Nov. 30 (Bloomberg) -- Silverjet Plc, the business-class-only
airline that started flights in January, may purchase new widebody
planes from Boeing Co. or Airbus SAS after the billionaire Reuben
brothers agreed to invest in the company.
Silverjet may buy Boeing's 787 Dreamliner or the rival A350
from Airbus, Chief Executive Officer Lawrence Hunt said in an
interview. It will also look at the older Airbus A330 or add more
Boeing 767s to the three that make up its fleet now.
David and Simon Reuben agreed to loan Silverjet 10 million
pounds ($20.6 million), convertible into 18.3 million shares by
Feb. 11, the Luton, England-based carrier said a week ago. The
brothers have a net worth of $4.5 billion, according to Forbes
magazine. With assets including Oxford Airport, 40 miles northwest
of London, their involvement will reassure the planemakers of
Silverjet's creditworthiness, Hunt said.
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starting again with new planes is one new plan.
It shows that operating with the old 767s is not viable in the long term.
How much do 5 off boeing 787s cost?
Given a billion you can make a profitable airline as long as you do not expect any of the billion back.
the Billionair may do quite well. The inital investors build the brand and do the market testing. Operate the airline at a massive loss for two years while it builds up trade. Just before it goes under the new guy turns up and puts in a few hundred million at 20p/share. by then the £70m put in by the inital investors is worth £10m.
It shows that operating with the old 767s is not viable in the long term.
How much do 5 off boeing 787s cost?
Given a billion you can make a profitable airline as long as you do not expect any of the billion back.
the Billionair may do quite well. The inital investors build the brand and do the market testing. Operate the airline at a massive loss for two years while it builds up trade. Just before it goes under the new guy turns up and puts in a few hundred million at 20p/share. by then the £70m put in by the inital investors is worth £10m.
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I read somewhere that the Reuben's have never lost on any deal, ever. Interesting to see the purchase of a regional airport first (Oxford), then three month's later a key stake in a new 'business' airline - what next?