As expected, Silverjet ceased all operations on Friday, marooning more believers in the “business-class-only” model and completing the hat trick of airlines in that niche to go bankrupt in the last six months. At root of the issue are the same old villains, high oil prices and lack of demand in the business-class-only market. It’s just too hard to get started as a niche carrier these days.
On their website, the recently deceased airline leaves a brief eulogy and thank you to its dedicated passengers, offering to those stranded: “You are advised to seek alternative travel arrangements with other carriers, and contact your credit card company or travel agent directly for information on obtaining refunds.”
So much for their CEO Lawrence Hunt’s strong words and encouragement after Eos and Maxjet fell.
All eyes are now on L’avion, the French carrier established in 2006 flying under the same business model (but to Paris instead of London). Will they prevail where Maxjet, Eos and Silverjet failed? What about British Airways‘ OpenSkies airlines who are set to fly next month?
I wish there was not as direct a correlation between oil prices and airline bankruptcies as there is now. But if it the statistical data hold true, I’m not sure if anyone has a chance anymore.
Remember when Eos bit the bullet a few months back and Silverjet grazed close to the line but was bailed out by the United Arab Emirates? Well, that money didn’t work out. One of the last business-class-only carriers just suspended it’s shares from trading in a move that many suspect may lead to the airline’s collapse.
“It’s business as usual” they claim, however, as they’ve been looking desperately for that five million dollars that the UAE was supposed to front, and company brass still encourages passengers to keep booking tickets.
Recall that right before Eos went south that they suspended trading of their shares as well. And that Maxjet, another competitor on the transatlantic business-class-only sector folded late last year because they couldn’t operate in the black.
Would I buy a ticket now? Nope.
But for some reason, bureaucrats still believe that business-class-only service is a profitable operation. Singapore Air recently started service direct between New York to Singapore with Los Angeles to Singapore slated for later this year. British Airways‘ OpenSkies plans to start service between JFK and much of Western Europe. Why? What do you know that these niche carriers didn’t?
At least the two new competitors have strong financial backing from legacy carriers. As history predicts though, they’re in for a tough road ahead.
If you’ve been following the airline industry over the past few months, you may have noticed that things aren’t going so hot. Several airlines serving niche industries have gone under including Skybus (budget), Oasis Hong Kong (long haul budget) and Eos and Maxjet (business class only).
When the market is tight, niche carriers like above are particularly affected because passengers tend to revert back to the old trustables, legacy carriers that have a lower probability of going out of business and that can provide a sure thing. Effectively, the downturn in the industry creates a secondary problem for the company: in addition to now having to pay high fuel and operating costs, fewer passengers are now generating revenue with which carriers can operate.
Thus defines the problems faced by the half dozen or so carriers that have gone belly up in the last few months, and what is continuing to plague carriers that are still afloat.
Like other carriers, the last remaining business class only airline in operation, Silverjet, has been struggling in the recent market. It was only by a recent injection of $25m by a private United Arab Emirates investor that they’ve been able to stay afloat.
How long will Silverjet be able to last on this crutch? Will they be able to turn business around and operate with a profit in the current market? Is business-class-only a viable model? Your guess is as good as mine. Stay tuned to find out.
We’ve already written about two high-profile and high-end airlines, Silverjet and EOS, that promise spacious seats (that morph into beds) and an end to those coach class ghettos.
It seems the big boys want a piece of the pie. Starting in June, British Airways will start running flights from New York to various European cities under the subsidiary “OpenSkies,” their new premium-level airline. Here’s the run-down on the cabin configuration, using a Boeing 757. There will be 24 flat-bed seats, 28 “premium-economy” seats with 52 inches of legroom, and curiously, 30 coach seats.
It seems the coach seats, which were controversial, were added to entice stingier customers to upgrade (the theory goes they won’t be able to say no once they see the reclining beds).
The verdict is still out on premium flights like these. Virgin Atlantic has been running them for quite a while, and it’s catching on, though not like wildfire. Either way, I’d love to land a seat on one of these flights. Anyone have a spare ticket :-)?
Ladies, do you cringe at the thought of using the airplane bathroom mere moments after seeing a big burly man exit from it? Have you ever, while waiting next in line to use the loo, crossed your fingers and offered unquestioned loyalty to the divine figure of your choice if he/she will only guarantee that the person who emerges from the bathroom next is pretty-smelling and feminine? Yeah, me too. We get segregated washrooms in the airport … why not the airplane too?
Good news: Silverjet, a new-ish carrier that offers service between London’s Luton airport and New York’s Newark is offering women-only bathrooms on their trans-Atlantic flights. And they have the controversial commercial to prove it. And while I know that women can be just as gross as men, and though I never fly between New York and London, it’s just a teensy bit exciting to a gal like me. Will other airlines follow suit? Only time will tell.
It does, however, seem a bit sexist. I wonder what the male travelers have to say about it.