Silverjet, the scrappy all-business-class startup, is in serious trouble with its latest round of financing. Trading in its shares has been suspended in
Here's the announcement this morning from the carrier, the third all-business-class startup in recent years (MaxJet and Eos having since joined the Choir Invisible). The fourth is the French all-business-class startup l'Avion, which announced its third Paris-Newark route yesterday.)
"On 6 May 2008, Silverjet announced that on 2 May 2008 Silverjet Aviation Limited (“Silverjet Aviation”), a wholly owned subsidiary of Silverjet, had entered into a £8.4 million loan facility agreement (the “Loan Facility”) and that Silverjet had entered into a proposed £4.3 million subscription agreement with Viceroy Holdings LLC (“Viceroy”). On 2 May 2008, Silverjet Aviation served a notice under the Loan Facility to draw down approximately US $5 million.
Silverjet has yet to receive the full drawdown.
As announced on 30 April 2008, Silverjet's working capital reserves are limited and advances under the Loan Facility are required as a matter of urgency.
In the circumstances, Silverjet has requested, and the London Stock Exchange has confirmed, an immediate suspension in the trading of the ordinary shares of the Company on the AIM market of the London Stock Exchange.
Silverjet continues discussions with other parties, which have confirmed an interest in investing in the company. In the meantime, Silverjet’s services continue as scheduled."
United Airlines initiated a new round of fare hikes, and we'll see if the rest fall into step on this one, considering the ongoing softening in demand. As of this afternoon, American and Delta joined in to match United's fare increases.
Last night, Rick Seaney at FareCompare.com wrote:
The increase ranges from $10 to $60 roundtrip based on mileage between cities:
---City pairs greater than 1,500 miles roundtrip (750 miles one-way) have been increased by $30 or $60
---City pairs between 800 miles and 1,500 miles roundtrip (400 – 750 one-way) have been increased either $20 or $40
---City pairs under 800 miles (400 miles one-way) have been increase $10 or $20 roundtrip
Also in this airfare distribution, AirTran raised airfares by $50 roundtrip across the bulk of its route system in the same airfare distribution.
There is no doubt that the airline industry, legacy airlines in particular, are in dire straits -- tonight United used one of the three types of arrows remaining in its woefully bare quiver to combat $130+ barrel oil: Airfare Hikes, Fee Hikes and Capacity Reductions
That said the timing of this increase -- on the heels of customer satisfaction survey woes and American Airlines contentious $15 first check bag fee this week – is at best a bit tone deaf -- underscoring the desperate measures that are likely to follow if oil prices continue rise unchecked.
Will the other legacy airlines match? To that I respond: Do they really have a choice? I would be surprised if we don’t see wide spread matching over the long weekend.
I have been asked numerous times in recent weeks if we have reached the tipping point on airfare hikes – that point where consumers begin to push back on higher prices (and fees) and passengers head for the exits …
Yes the signs of softening are there, yes many people are changing their travel plans, but what strikes me is that it really doesn’t matter. Airlines have no choice but to pass on the cost of fuel to consumers and when passengers do begin to push back in significant numbers the airlines have no choice but slash capacity by that same amount.
A bright spot for passengers is that airlines have to keep the planes completely full and that means those willing to travel on off-peak days like Tuesday, Wednesday and Saturday and off-peak times of day can still get reasonably priced tickets if they don’t procrastinate and start shopping a few months before departure.
...I will continue to update on any significant matching and rollback activity related to this increase." -- Rick Seaney.
1. January 3rd, initiated by United, $10 roundtrip, base airfare hike, successful
2. January 11th, initiated by United, $30 roundtrip, fuel surcharge hike, unsuccessful
3. January 17th, initiated by American, $20 roundtrip, fuel surcharge hike, unsuccessful
4. January 24th, initiated by Continental, $20 roundtrip, fuel surcharge hike, successful
5. February 22nd, initiated by United, $10 roundtrip, base airfare hike, successful
6. February 28th, initiated by Delta, $10 roundtrip, base airfare hike, successful
7. March 7th, initiated by United, $10 roundtrip, fuel surcharge hike, successful
8. March 14th, initiated by United, $4-$50 roundtrip, base airfare hike, successful
9. March 19th, initiated by Delta, $10 roundtrip, fuel surcharge hike, unsuccessful
10. March 27th, initiated by Delta, $10 roundtrip, fuel surcharge hike, unsuccessful
11. April 9th, initiated by United, $4-$30 roundtrip, base airfare hike, successful
12. April 15th, initiated by United, $10-$20 roundtrip, fuel surcharge hike, successful
13. April 24th, initiated by United, $4-$70 roundtrip, base airfare hike, successful
14. April 28th, initiated by Delta, $10 and $40 roundtrip, fuel surcharge hike, successful
15. May 7th, initiated by Delta, $20 roundtrip, fuel surcharge hike, successful
16. May 22nd, initiated by United, $10 - $60 roundtrip, base airfare hike, pending