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Silverjet stops flights as it runs out of cash

Silverjet said it stopped flights on Friday after failing to get a $5 (£2.5 million) million loan from Abu Dhabi-based investors, becoming the third London to New York business class-only airline to run out of cash.

Silverjet, which along with Eos and MAXJet tried to steal away business class customers from larger carriers, such as British Airways and Virgin Atlantic with cheaper tickets, more space and quicker check-ins, said its fleet of three aircraft will be grounded when the last flight returns. Silverjet needs an emergency injection of cash or it will follow now-bankrupt Eos and MAXJet out of business. All three focused on the lucrative market of business people jetting between meetings in London and the US.

Silverjet is talking to investors about a rescue package but had “yet to conclude such discussions to its satisfaction”. Douglas McNeill, transport analyst Blue Oar Securities, said by phone: “The climate for attracting capital into the airline industry has never been worse. There was speculation Lufthansa showed an interest but if they were going to do something I think they'd have done it by now.”

The airline, based at Luton airport in the north of London, said Abu Dhabi-based fund Viceroy Holdings had failed to give it the first $5 million of an £8.4 million loan facility it had reached initial agreement over. “It is with deep regret that the board of Silverjet has decided that it must suspend operations with immediate effect,” it said in a statement on Friday. Shares in the airline were suspended last week after the company said it had not received the loan from Viceroy that was meant to guarantee its future in a tough economic climate. In the last six months business-class-only carriers Eos and MAXJet went bust, citing increasing jet-fuel costs as the main reasons for going out of business. (Reuters)