EOS secures additional funding

[STN Ramp Rat]

with the other thread about EOS closed I have had to start another one but it would seem they are not short of cash as everyone was saying.....


Eos Airlines Enters Into Term Sheet for $50 Million of Capital

Funding Underscores Investor Confidence in Eos' Business Model Despite Challenging Economic and Credit Environment

PURCHASE, N.Y., April 19 /PRNewswire/ -- In the face of tight credit markets and an economic environment that has led to several industry failures, Eos Airlines, the premium New York to London carrier known for its operational excellence and uncrowded Guest experience, announced today that it has agreed to a term sheet outlining the terms on which Eos will secure an additional $50 million in capital from a current investor. The transaction, which is scheduled to close May 1, 2008, underscores confidence in Eos' proven business model built around an entirely new class of air travel.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080312/NYW015LOGO)

"When we closed on our last round of financing, we were clear that we would need to raise additional capital," said Jack Williams, Eos President and CEO. "Our success - in the face of this extremely challenging economic and credit environment - shows that investors continue to be enthusiastic about our business model.

"At a time when much of the airline industry is mired in misery, we have provided outstanding service and shown an uncompromising commitment to quality. We've achieved an extremely high level of satisfaction among our Guests, many of whom have personally embraced the company and become our de facto ambassadors. We have the most efficient business model, our flight loads have increased and our revenues have risen consistently.

"Now we have a term sheet with a current investor for the financing needed to take us to corporate profitability in 2009.

"I want to take this opportunity to express my appreciation to our dedicated employees, who come to work each and every day with the goal of transporting our Guests - literally and figuratively - and who have made our success possible."

The Eos Class experience is so far beyond traditional airline service that it is "unairline." Eos flies the world's only fleet of Boeing 757s outfitted for just 48 Guests and provides door-to-door, stress-free, seamless travel. Currently operating up to 44 flights a week between New York JFK and London Stansted, Eos recently announced new routes between Newark/Stansted and London/Dubai for 2008. The company also recently introduced a lifestyle magazine, Eos Class, a fresh and modern tasting menu and significant upgrades to their loyalty program, Club 48.

About Eos

Eos provides single-class premium service in a class by itself - "Eos Class." Eos was named 2007 "Best Long-Haul Business Airline" at the Business Travel World Awards based on the strength of its dedicated employees, operational excellence and "uncrowded" Guest experience. Eos flies the world's only 757s outfitted with just 48 "suites," each of which houses an award- winning 6'6" fully-horizontal flat-bed and provides 21 square feet of personal space with unobstructed aisle access for every Guest. Eos offers up to 44 flights per week between New York's JFK Airport and London's Stansted Airport and recently announced flights from Newark, N.J. beginning May (tickets on sale now) plus service from London to Dubai commencing July. Eos takes responsibility for the complete end-to-end experience of its Guests. For more information, call (800) 598-2169.

[Two-Tone-Blue]

The Eos, and MaxJet, concepts suited us. Retired, "financially comfortable" and looking for something better than "Premium Economy" without shredding pound notes going Club/whatever.

Shame we don't want to go to NY ... MaxJet to IAD had us captured.

However, we are realists. There is no "business" to speak of in DC. Those who go there are are on Govt business, and don't give a rat's **** about the cost. Which is bizarre, as DC and the area is a fantastic holiday destination... but it's a secret. ;)

[AKAAB]

http://biz.yahoo.com/bw/080426/20080426005030.html?.v=1

Eos Airlines Files for Chapter 11
Saturday April 26, 9:58 pm ET
Planned Investment does not Close; Premium Class New York-London Carrier Forced to Wind Down Operations

PURCHASE, N.Y.--(BUSINESS WIRE)--Eos Airlines, the premium class New York to London carrier, which has become known for its operational excellence and uncrowded Guest experience, announced today that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The petition was filed April 26, 2008 in the U.S. Bankruptcy Court in the Southern District of New York.

ADVERTISEMENT
On April 26, 2008, Eos plans to operate Flight 6 (8:30pm) from JFK to STN. On April 27, 2008, Eos plans to operate Flights 3 (1:00pm) and 7 (6:30pm) from STN to JFK. Flight 5 from STN to JFK and all flights from JFK to STN on April 27, 2008 are canceled. Eos will immediately implement a reduction in its workforce, eliminating the positions of most of its employees, and will cease operations entirely after April 27, 2008.

Jack Williams, Eos’ CEO, said: “After overcoming today’s extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action. We had been clear since closing on our last round of financing that we would need additional capital. As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success.

“Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome. It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed. That leaves us with insufficient cash on hand to continue operations.

“There are times in business when even though you execute your business plan and even though your employees do their jobs beautifully, external forces prevent you from controlling your own destiny.

“I want to express my appreciation to our dedicated employees and to the many Guests who have become like family to us.”

Guests and suppliers who need more information should visit www.eosclass.com.

Court filings and claims information will be available at http://kccllc.net/eosairlines.

[armada]

Who's left, Silverjet? :(

[Airbubba]

Time for another sad last round at the Three Horseshoes...

[Toothbrush]

5th US airline to file for chapter 11 in a month.

[daz211]

Eos has GONE !
http://www.eosairlines.com/

[NickBarnes]

This is sad news indeed, wish all concerned well!!

[captjns]

Unfortunately the jubilance vis-à-vis the $50 million infusion last week was premature. I am very sorry to hear about EOS. I hoisted many a pint with many with fine EOS front line team members. I wish them all a swift, seamless, and painless transition in securing employment elsewhere.

[4engines4longhaul]

Personally, i sadly have to conclude that Silverjet will not be far behind Eos and Maxjet

[smith]

will silverjet be next?

[Muizenberg]

Oil $120 per barrel, credit crisis...

Gone: ATA, Aloha, Maxjet, Oasis Hong Kong, EOS...
Chapter 11: Frontier
Staff Reduction/excelerated fleet retirement: United

Have to think:

Hanging on in by a thread: Silverjet, L'Avion, Alitalia
Never get off the ground: Openskies
In question: Tiger Airways, Nationwide (SA), 1 time (SA), BMI Baby

Who will be the next legacy carrier to annouces major job cuts, retire old aircraft??

[Sobelena]

Can't find the thread right now, but I remember that about a week ago some poor guy got the usual PPRuNe abuse because he posted that he'd heard (through colleague sources) that EOS was about to call it a day. Lots of PPRuNers with egg on their faces now.

[rubik101]

I suppose BA still think Open Skies has a chance of success? Premium service from European cities, A319s from London City? Tech stop in Shannon? I give it one year, max.

[TotalBeginner]

Can't find the thread right now, but I remember that about a week ago some poor guy got the usual PPRuNe abuse because he posted that he'd heard (through colleague sources) that EOS was about to call it a day.

Do you mean THIS ONE? (http://www.pprune.org/forums/showthread.php?t=322916)

[jam8080]

Why is bmibaby questioned to not make it?

[Muizenberg]

BMI Baby is in a shrinking market with 2 preditory competitors (Ryanair and Easyjet) which will do anything to survive. They operate old thirsty aircraft vs. FR and EZY. Be assured these two are waiting in the wings to pounce...

FR and EZY are to LOCO what BA and VS are to Full service...all intent on preserving their market share with little regard for others.

FLYBE and BMI (mainline) have their niches...the BMI group is too segmented and IMHO BMI Baby maybe the part that goes.

[en2r]

BMI Baby is in a shrinking market with 2 preditory competitors (Ryanair and Easyjet) which will do anything to survive. They operate old thirsty aircraft vs. FR and EZY. Be assured these two are waiting in the wings to pounce...

FR and EZY are to LOCO what BA and VS are to Full service...all intent on preserving their market share with little regard for others.

FLYBE and BMI (mainline) have their niches...the BMI group is too segmented and IMHO BMI Baby maybe the part that goes.
When Lufthansa takeover BMI things could change drastically. They could integrate Baby into Eurowings/Germanwings (their low cost subsidy) - There are already talks of that merging with TUI so perhaps the three could be brought together to create a major European low cost airline. Alternatively they could sell off Baby. Possible suitors could include Jet 2, Globespan, Easyjet or perhaps even Aer Lingus? I think its highly unlikely that Baby will be left to continue in its current state when Lufty takeover!

[Two-Tone-Blue]

My sympathy to those at Eos.

It clearly seems this business model doesn't work, which continues to surprise me. I have to assume it's the size of the operation, and the overheads, that's the killer.

[gatwicknose]

too many VPs a huge office in NY....expensive office in London...too many aircraft for 16 weekly flights.....no intial policy on cost control...but some great people working for them.....I woner what the salaries for the apologists on the EOS website are??? am guessing much of the loss can be attrubuted to their cost!!!...good on them for persuading investors to stump up cash...but 300mllion dollars????......

[Crappy]

Maxjet - Old fashioned business seats
Eos - Like first class, but only 50 seats/flight
OpenSkies - cant imagine any French folks taking this one ahead of L'Avion

Silverjet - 100 modern bed like seats - this is the sweet spot and has enough pax where the finance makes sense.

[CJN72]

Sobelena......Try and have some respect for those crew who have just lost there jobs with EOS, maybe one day you'll be in that situation and if you are remember your comments about people having egg on there faces!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[hunterboy]

I'm no revenue analyst, but surely you need pax from both ends of a route to buy tickets to make money? Just appealing to half of your potential market seems crazy...just the sort of thing BA would do in fact. I'd go as far to predict BA will throw millions away on OS before calling it a day,and then pleading poverty to BA staff when it comes to pay claims and pension contributions.

[Skipness One Echo]

I'm no revenue analyst, but surely you need pax from both ends of a route to buy tickets to make money? Just appealing to half of your potential market seems crazy...just the sort of thing BA would do in fact.

Describes the entire UK-Florida services really, and most of the UK-Spain holiday runs.....

[rebellion]

Farewell EOS. I agree, SilverJet's next sadly.

Impossible economics.

[3rd_ear]

Someone from SilverJet was on Radio 4's Today this morning talking about this. He reckoned that because their market wasn't only City corporates but SMBs and luxury vacationers, they would have a much better chance of survival. They're only a month or two away from break-even, which for a business only a year old is ok. They also structured their prices so that they've been able to hike fares 20% since they started up, without losing any business.

So maybe they'll make it? Good luck to 'em.

[The Real Slim Shady]

Could be tough: they are looking to raise £72 Million on a business valued at £9.3 million to keep going.

[PC767]

..... surely the vast majority of those uk holiday takers need to then travel from florida and spain.

[Taildragger67]

PC767,

What Skipness 1E was saying, in response to Hunterboy's post, was that there are several routes where the originating traffic is only at one end, and the return sectors are generally those punters returning to base. So it is possible to operate routes quite happily with the bulk of your traffic originating at one end. Yes, they have to go home at some stage.

In other words, you don't see nearly as many Floridians or Spanish coming to the UK, as you see UK'ers going the other way, then home again.

[babemagnet]

Skipness 1 echo what are you doing here on this thread?

You were saying this before:

Back it up or remove the thread please. Unsubstantiated crap can have a dangerous effect so please put up or shut up.

You told it here: http://www.pprune.org/forums/showthread.php?t=322916

Say sorry first and if somebody heard something do not jump to conclusion to fast! This is a rumour website!!!! Or you do not understand?

[Skipness One Echo]

Skipness 1 echo what are you doing here on this thread?

I will post if I think I have something relevant to say, that is the nature of this site. I felt the initial post was completely unsubstantiated and dangerous, it was a similar rumour spread by certain UK airlines that pushed Harry Goodman's Air Europe over the edge. OK so you heard an airline is going bust, but you should always put up a source or shut up. Most of the more balanced minds on here understand the damage that "my mate told me" threads can do. In this case, the rumour was ****, as it was the financing falling through later on that caused Eos to close.

Also in fairness, I don't need your permission to post on a thread, so take your medication and calm down a little there......good God man, no need to get personal at me ! I hope that all at Eos find a soft landing at a good employer soon.

[old-timer]

That's sad news, seeemd like a good operation too, one less customer for the diamond too...not good for STN generally :(

[sat1]

That's sad news, seeemd like a good operation too, one less customer for the diamond too...not good for STN generally :(

Especially Servisair...more redundancies???? or will they save jobs with a split shift pattern?? hhhmmmmmm.With a peak morning and evening it would certainly make sense for the company.

[rusty_c]

Or keep things the same, more time for poker?

[angelic111]

"The rumour was ****, as it was the financing falling through later on that caused Eos to close."

Like saying the airline was losing money because of its inability to turn a profit! The original poster on Eos's bankruptcy was spot-on -- the airline was in trouble and they knew it (at least as far back as early March). It's a shame some people come to this forum (a RUMOUR forum!) and put down anything they deem to be negative by claiming it's "dangerous."

[TOWTEAMBASE]

EOS was a very good airline, that was always at lest 75% full. carried freight which is extra dosh, and were very very rarely tech...so where did it go wrong. good luck to all the girls and boys at EOS. Its a shame that the yanks dont like foreign investors. i hope the rumour that maxjet are reforming is a NASTY rumour and not gospel :confused:

[angelic111]

MAXJet reforming? They've been bought by some college travel operator...

April 16 (Bloomberg) -- MAXjet Airways Inc., the
business-class carrier that filed for bankruptcy protection,
was bought by NCA Sports Group Inc., a provider of flights
and bus trips for college athletes and their fans.
A U.S. bankruptcy court approved the sale of MAXjet's
assets to MAXjet Airways Acquisition Group LLC, which is
owned and operated by NCA Sports, according to the Dulles,
Virginia-based carrier's Web site.
MAXjet filed for Chapter 11 bankruptcy protection on Dec.
24, citing crippling fuel costs and increased competition.
The airline had aimed to provide business-class seats at a
lower price than traditional, multi-class airlines. NCA,
based in Bentonville, Arkansas, operates a charter service
for university sports teams, according to its Web site.
``I am looking forward to adding MAXjet to the NCA
Sports Group family,'' NCA Chief Executive Officer Kevin
Clark said on the MAXjet Web site. ``We believe that it's
time for a smart luxury charter service that combines
comfort, value and flexibility.''
MAXjet was authorized to sell its assets to MAAG for
$1 million in cash, according to filings at the U.S. Bankruptcy
Court in Delaware on March 26. The assets include an operating
certificate from the Federal Aviation Administration.

[Kazamb]

Im Assuming that the deals excludes any aircraft albeit leased or otherwise. All NCA seem to be getting is the AOC, and rights to the name.

[flying brain]

Don't rule out a re-financing of EOS under Chapter 11 and re-launcing with fresh capital and no debt burden.

[loveJet]

oh please, don't make me laugh.

Even if that DID happen, do you truly believe it's wise in these difficult trading times? What a waste of millions of pounds/dollars that could go to Burma

[befree]

EOS chose to go into bankruptcy due to the rate it was burning cash. The papers to the court stated it had about $70m assets and $35m debters. They needed more cash to keep going but it would just go into running at at loss. It would make more logic to wait to see if the oil price falls and the next boom starts.

[loveJet]

They'll Be Waiting A While Then!

[jotape]

well either the Latin American market has suddenly decided to go for premium, or most likely the EOS 757s are being readied for a resale - anyway saw two of them parked at Mexico City airport on Monday