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Silverjet Can They Really Make It?  
User currently offlineBP1 From United States of America, joined Aug 2007, 593 posts, RR: 1
Posted (5 years 11 months 3 weeks 6 days 9 hours ago) and read 5168 times:

Recently, Silverjet was looking to raise some $100 Million USD to continue operations. That said, even with Eos now out of the picture, will Silverjet be viable in a few months? If oil stays at $118 USD per barrel, how much longer can Silverjet stay active in the picture?

Thoughts?

BP1


"First To Fly The A-380" / 26 October 2007 SYD-SIN Inaugural
30 replies: All unread, showing first 25:
 
User currently offlineScouseflyer From United Kingdom, joined Apr 2006, 3364 posts, RR: 9
Reply 1, posted (5 years 11 months 3 weeks 6 days 9 hours ago) and read 5163 times:

Someone from high up in SilverJet was on the BBC yesterday and put a very convincing case. He reckoned that they need to sell 65 seats on each flight to break-even. That's out of 12000 London - NY pax a day.

User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 2, posted (5 years 11 months 3 weeks 6 days 9 hours ago) and read 5136 times:

Yes, I hope they can.

EOS was much more expensive (2 to 3 times the price, but, with true lie-flat beds).

MaxJet wasn't as good service as Silverjet, and, flew out of STN.

Silverjet is excellent. The private terminals experience is an added bonus.

And, they are the price of premium economy. So, yes, I hope they do make it.

Could it be that Silverjet will make it because they are not too ambitious with overexpansion?

However, I think the share price of silverjet has fallen 90% in recent months.

They do deserve to succeed. If they fail, we the passenger lose out.

Airways45


User currently offlineSketty222 From United Kingdom, joined Mar 2006, 1775 posts, RR: 3
Reply 3, posted (5 years 11 months 3 weeks 6 days 7 hours ago) and read 4987 times:



Quoting Airways45 (Reply 2):
Could it be that Silverjet will make it because they are not too ambitious with overexpansion?

This from the airline that flies two routes out of London, JFK and DXB. They are advertising their low fares non-stop as well so it looks like they need the business.
I read an excerpt in the paper from one of the directors I believe stating that they were very close to making a profit. Lets hope they do and they carry on for a bit longer, personally I think that if oil stays at such a high price they will be gone in 6-9 months



There's flying and then there's flying
User currently offlineJuventus From United States of America, joined Dec 2004, 2835 posts, RR: 2
Reply 4, posted (5 years 11 months 3 weeks 6 days 6 hours ago) and read 4891 times:

They might make it now, with two competitors out of the way. I must admit, I'm no fan of this crap (start ups, LCCs). I'd rather see the legacies do well.

User currently offlineBHXFAOTIPYYC From Portugal, joined Jun 2005, 1644 posts, RR: 0
Reply 5, posted (5 years 11 months 3 weeks 6 days 6 hours ago) and read 4823 times:

We've had a couple of clients use Silverjet and they said it was excellent. They life near LTN though, and they loved the dedicated terminals in LTN and DXB. Excellent value for money too.

So would I sell it to a client? For fairly imminent departures - probably, but no way would I be booking people even 2 or 3 months down the road. Hopefully others have more faith than me and do continue to book though.



Breakfast in BHX, lunch in FAO, dinner in TIP, baggage in YYC.
User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 6, posted (5 years 11 months 3 weeks 6 days 2 hours ago) and read 4520 times:

I think the days of business / premium travel are coming to a close. The yields might be higher than economy but too many businesses are cutting back on such tickets.

The future is economy and premium economy flights, with a smattering of business seats for those private individuals who are prepared to pay the price.


User currently offlineMaskeer From , joined Dec 1969, posts, RR:
Reply 7, posted (5 years 11 months 3 weeks 6 days 2 hours ago) and read 4501 times:

I was wondering why all-premium airlines find it difficult to survive. They only carry high-yield customers, and may have more room for cargo.
I can see why the logistics can be more complicated than for a big airlines, but apart from that? Is not flying out of LHR such a pain? It may be for connecting flights, but I'm sure that the market London-US is big enough by itself.
 Confused
Thanks for any answers.


User currently offlineCOFanNYC From United States of America, joined Jan 2007, 214 posts, RR: 0
Reply 8, posted (5 years 11 months 3 weeks 6 days 2 hours ago) and read 4475 times:



Quoting Babybus (Reply 6):
I think the days of business / premium travel are coming to a close. The yields might be higher than economy but too many businesses are cutting back on such tickets.

The future is economy and premium economy flights, with a smattering of business seats for those private individuals who are prepared to pay the price.

I know this is anecdotal but....in the past three weeks, I've taken 6 transatlantic flights. On all 6 flights, the front two cabins were packed and the rear cabin was about 60%.

Does anyone have any concrete stats that premium cabin bookings are down and being replaced with economy bookings or is it all just "I've heard that companies are cutting back" evidence?


User currently offlineLAXintl From United States of America, joined May 2000, 24326 posts, RR: 47
Reply 9, posted (5 years 11 months 3 weeks 6 days 2 hours ago) and read 4444 times:



Quoting Maskeer (Reply 7):
I was wondering why all-premium airlines find it difficult to survive.

Simply put, they are built on a very iffy business premise.

More specifically, they can neither gain the critical mass required with their cost base, nor can they generate close to revenue required or matching that of mainline carriers. Basically they are squeezed by a very high cost base, and low revenue generation.

The premium carrier model has been tried one way or the other a dozen times in the US alone (MGM Grand, Regent Air, McClain, AirOne, UltraAir, Air Atlanta etc..) and each fell on their face.

I guess what this proves is that there are always dreamers in this industry, and long supply of sucker financiers.

Luckily with the economic slowdown, and credit market tightness people are finally starting to look at business plans and tempering their previous overzealous enthusiasm to feed such flawed airlines.



From the desert to the sea, to all of Southern California
User currently offlineSketty222 From United Kingdom, joined Mar 2006, 1775 posts, RR: 3
Reply 10, posted (5 years 11 months 3 weeks 6 days 2 hours ago) and read 4372 times:



Quoting Babybus (Reply 6):
I think the days of business / premium travel are coming to a close. The yields might be higher than economy but too many businesses are cutting back on such tickets.

The future is economy and premium economy flights, with a smattering of business seats for those private individuals who are prepared to pay the price.

I tend to disagree, BA's premium traffic alone is up year on year
Its very hard to find a flight to NYC that isnt busier up the front than dwon the back. Other destinations are also booming in premium cabins.

Quoting Maskeer (Reply 7):
I was wondering why all-premium airlines find it difficult to survive. They only carry high-yield customers, and may have more room for cargo.

I think they base themselves on delivering a top quality product to compete against the legacy carriers. Unfortunately for these premium only carriers, they dont fly into the best airports.
I think this is one of the reasons that OpenSkies has a 3 cabin config. Business, Premium Y and Y
Its going to give itself a chance by offering a reasonably priced (hopefully) Y product helping to increase the revenue the flight makes



There's flying and then there's flying
User currently offlineAvek00 From United States of America, joined Oct 2004, 4282 posts, RR: 20
Reply 11, posted (5 years 11 months 3 weeks 6 days 1 hour ago) and read 4351 times:



Quoting Babybus (Reply 6):
I think the days of business / premium travel are coming to a close.

To the contrary, longhaul premium travel is GROWING significantly, especially as airlines readjust their pricing philosophies to focus more on maintaining stronger premium loads (and increasingly, on a year-round basis) rather than an absolute obsession on yields to the exclusion of all else. Indeed, a significant reason as to why these start-ups are having trouble is that their niche has become irrelevant if not borderline completely outmoded -- over the past few years, premium cabin fare offerings have moved downward such that it's possible to obtain sub-$2500 seats in Business from BOS/NYC/WAS to LON/PAR/FRA more or less year-round, especially with some advance planning (and price-conscious travelers, like those who desire a deeply-discounted premium seat, tend to be advance-purchase types). And with superior networks, schedules, and addictive FF programs, US and Euro legacies can and are running the table against the upstarts.



Live life to the fullest.
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3475 posts, RR: 3
Reply 12, posted (5 years 11 months 3 weeks 6 days 1 hour ago) and read 4312 times:



Quoting Babybus (Reply 6):
I think the days of business / premium travel are coming to a close. The yields might be higher than economy but too many businesses are cutting back on such tickets.

The future is economy and premium economy flights, with a smattering of business seats for those private individuals who are prepared to pay the price.

If your predictions come to pass, we can expect a bloodbath in civil aviation. The entire economic strategy of the major carriers is based on making their money from the premium passengers. It could be said that economy is only there to ensure the correct spacing between the wing and the tail

Quoting Maskeer (Reply 7):
I was wondering why all-premium airlines find it difficult to survive. They only carry high-yield customers,


One factor is their very limited route network. They are/were fine if you want to fly London - New York, but most businesses need to fly to other destinations as well. Thus its better to enter into a corporate egreement with an airline that can provide the majority of your requirements.

Whilst I'm sure that the Silverjet facilities at LTN are very good, the airport does suffer from an image problem. To the majority of the UK public LTN means Charter or LCC


User currently offlineTheginge From United Kingdom, joined Oct 2006, 1126 posts, RR: 0
Reply 13, posted (5 years 11 months 3 weeks 6 days ago) and read 4192 times:



Quoting Scouseflyer (Reply 1):
Someone from high up in SilverJet was on the BBC yesterday and put a very convincing case. He reckoned that they need to sell 65 seats on each flight to break-even. That's out of 12000 London - NY pax a day

It is all very well filling the plane but you still need capital to survive in the early stages until you can make enough money to keep going. Hopefully Silverjet gets a cash injection from somewhere soon.


User currently offlineFerengi80 From United Kingdom, joined Mar 2007, 685 posts, RR: 0
Reply 14, posted (5 years 11 months 3 weeks 5 days 23 hours ago) and read 4058 times:
Support Airliners.net - become a First Class Member!

I've got a little bit of money coming from the taxman as a tax rebate, and am seriously thinking putting some of this into buying Silverjet shares. My guess is, if I take the risk, and don't buy too many shares, I will either lose my money should the worst happen, or I will make a few bucks if they bounce back. With shares trading at 14p recently, it's woth a gamble!


AF1981 LHR-CDG A380-800 10 July 2010 / AF1980 CDG-LHR A380-800 11 July 2010
User currently offlineAPYu From United Kingdom, joined Sep 2007, 819 posts, RR: 0
Reply 15, posted (5 years 11 months 3 weeks 5 days 22 hours ago) and read 3959 times:



Quoting Sketty222 (Reply 10):
I tend to disagree, BA's premium traffic alone is up year on year

But how much of this increase is due to the gradual reduction in the Club Fares and what effect does that have on the overall balance sheet.

Its great that BA now have some good holiday fares in Club - JFK for less than £1100 is an absolute bargain and Ive never seen the fare so low. Even at the height of summer, when Business Class traffic is at its lowest, the fare has often been around the £1200 mark.

And with fares so low, the price difference when travelling Silverjet is becoming negligible. So unfortunately I too think Silverjet will soon disapear into the Luton archives.



We'd like to welcome in particular our Executive Club members and those joining us from our Oneworld alliance partners.
User currently offlineKennyK From United Kingdom, joined Apr 2005, 482 posts, RR: 0
Reply 16, posted (5 years 11 months 3 weeks 5 days 17 hours ago) and read 3751 times:

Now may be a good time to buy Silverjet shares IF they survive, at start, a year ago they were trading at almost 190p, at the moment they are trading at 14.5p. The market certainly doesn't think much of them, but if they went back up to where they were a nice 1300% profit would result. Though the present trend is down, not that they can get much lower.

All that can be predicted is that the future of Silverjet can not be predicted.  confused 


User currently offlineSketty222 From United Kingdom, joined Mar 2006, 1775 posts, RR: 3
Reply 17, posted (5 years 11 months 3 weeks 5 days 7 hours ago) and read 2871 times:



Quoting APYu (Reply 15):
But how much of this increase is due to the gradual reduction in the Club Fares and what effect does that have on the overall balance sheet.

Its great that BA now have some good holiday fares in Club - JFK for less than £1100 is an absolute bargain and Ive never seen the fare so low. Even at the height of summer, when Business Class traffic is at its lowest, the fare has often been around the £1200 mark.

I see your point but how many seats on the aircraft actually sell for these low fares? On a 70seat J config I doubt it would be more than 10%



There's flying and then there's flying
User currently offlineBHXFAOTIPYYC From Portugal, joined Jun 2005, 1644 posts, RR: 0
Reply 18, posted (5 years 11 months 3 weeks 5 days 7 hours ago) and read 2841 times:

Another factor is FF programs. Biz class pax are still keen to collect the miles. Nice to fly the family down to BGI once a year on the miles you earned ploughing backwards and forwards all year between LON and NYC.


Quoting Sketty222 (Reply 17):
see your point but how many seats on the aircraft actually sell for these low fares? On a 70seat J config I doubt it would be more than 10%

I agree. There are always conditions. Take BA I(india) class Club. 42 day advance purchase, non ref, non changeable. That type of ticket doesn't suit a lot of biz people.

The flip side to that is people could argue that with all the money you save flying Silverjet all year you pay for your family holiday with that. What is the demographic of the average Silverjet pax? Biz or leisure?



Breakfast in BHX, lunch in FAO, dinner in TIP, baggage in YYC.
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3475 posts, RR: 3
Reply 19, posted (5 years 11 months 3 weeks 5 days 7 hours ago) and read 2841 times:



Quoting KennyK (Reply 16):
Now may be a good time to buy Silverjet shares IF they survive, at start, a year ago they were trading at almost 190p, at the moment they are trading at 14.5p. The market certainly doesn't think much of them, but if they went back up to where they were a nice 1300% profit would result. Though the present trend is down, not that they can get much lower

The initial problem with this theory is that any injection of capital will result in a further dilution of the share price.


User currently offlineAPYu From United Kingdom, joined Sep 2007, 819 posts, RR: 0
Reply 20, posted (5 years 11 months 3 weeks 5 days 7 hours ago) and read 2810 times:



Quoting Sketty222 (Reply 17):
I see your point but how many seats on the aircraft actually sell for these low fares? On a 70seat J config I doubt it would be more than 10%

It will of course depend on the route and availability and only those in yield management will know for sure, but perhaps the availability of these low fares soon before departure may imply the figure of cheap tickets on some of the routes will be higher than 10%.

JFK is the easiest route to get a Cheap Club for on if you book more than 14 days in advance. LAX and SFO can be easy too. There are other routes where you can forget it, and the figure is probably less than 10 percent.

Those routes are also easy ones to use Miles for Upgrades on, which would again imply good availability in the bucket classes and perhaps suggest a larger proportion of travellers in the cabin have paid significantly less than J fares.



We'd like to welcome in particular our Executive Club members and those joining us from our Oneworld alliance partners.
User currently offlinePhilSquares From , joined Dec 1969, posts, RR:
Reply 21, posted (5 years 11 months 3 weeks 5 days 7 hours ago) and read 2800 times:

Seems as though there is some injection of funds

http://www.flightglobal.com/articles...unding-deal-with-uae-investor.html


User currently offlineBP1 From United States of America, joined Aug 2007, 593 posts, RR: 1
Reply 22, posted (5 years 11 months 3 weeks 5 days 2 hours ago) and read 2620 times:

So I guess selling a business plan to an investor in Dubai is the only way to survive? Does it make sense for an airline to simply manage by holding out its hand for money? That just seems too iffy for me.

BP1



"First To Fly The A-380" / 26 October 2007 SYD-SIN Inaugural
User currently offlineDavescj From United States of America, joined Jun 2007, 2292 posts, RR: 0
Reply 23, posted (5 years 11 months 3 weeks 5 days 1 hour ago) and read 2554 times:



Quoting Babybus (Reply 6):
I think the days of business / premium travel are coming to a close. The yields might be higher than economy but too many businesses are cutting back on such tickets.

The future is economy and premium economy flights, with a smattering of business seats for those private individuals who are prepared to pay the price.

Remember, many companies have pre-arranged contracts with carriers to put their employees on flights in J/F cabins. While not paying market rate (obviously), neither are they paying full price.

I think J is here to stay. Even F, esp in markets where the money is sufficient.

As to Silverjet, I think it would be interesting if they could form a partnership with a LCC in Europe. I think a good many might take a cheap short flight to connect to a cheap (ish) premium flight.

But who knows. We'll have to see what the market will bear.

Dave



Can I have a mojito on this flight?
User currently offlineVSFLYER747400 From United Kingdom, joined Oct 2005, 123 posts, RR: 0
Reply 24, posted (5 years 11 months 3 weeks 5 days 1 hour ago) and read 2540 times:

BBC is now carrying that story as well.

http://news.bbc.co.uk/1/hi/business/7375730.stm



Being on: (in no order) VS BA AA EK CX MH DL EI BD KL HV NW RC LH AF DA TG QF US FR LX AC SK AZ PG SQ UA PA
25 MaverickM11 : This will only postpone the inevitable, but then again with these funds they want to launch service to the West Coast of the USA, India, and South Af
26 Davehammer : Are they really? One is a low cost economy/barely premium economy carrier and one is a J class only carrier. I wouldn't say that they're chasing the
27 KennyK : I see the share price has gone up today by 17% from 14.5p to 17p, still some way to go 190p they started at but at least it's in the right direction a
28 Post contains links FlyingClrs727 : I just looked at the MaxJet website, and it says I guess it's cheaper to keep the name and not have to repaint them with a new livery.
29 MaverickM11 : They have different products, but they're both chasing very price sensitive, mostly leisure passengers.
30 MasseyBrown : Also they have very high fixed and overhead costs per passenger that eat up the premium fare in a hurry.
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