SilverJet closes up shop

The last operating all-premium carrier on the NYC-London route, SilverJet, has ceased operations as of this morning due to an inability to raise additional financing. They had actually announced that they’d reached terms with a group in UAE to provide them with some cash, but when they went to draw on the loan last week the money didn’t show up.

From the announcement on their web site:

Your belief in us was shared by our investors – but regrettably, due to unforeseen circumstances, they were unable to unlock the finance that we needed. As a result, we are very sad to announce that from 30 May 2008, we will cease operations and we are no longer able to honour flight reservations.

And so now all three premium carriers on the NYC-LON route have shut down. The only carrier still operating as an independent in that market is L’Avion which operates a NYC-Paris flight. And before you write off the concept of an all-premium flight operation, it is worth considering that there are some routes that seem to support it just fine. KLM operates Houston-Amsterdam on a 737 in an all-Biz config (contracted service provided by PrivatAir). Singapore Air has converted their A340-500s to all-Biz seats for the SIN-EWR route. Lufthansa has a
similar arrangement to KLM, with PrivatAir operating some flights for them as well. In the Lufthansa case they have actually used the PrivatAir operation to break in some new routes, upgrading them to full-size planes with normal seating arrangements once they have proven the demand. That makes me think that the demand issue is more one of the carriers and the routes, not the business model.

Considering how saturated the NYC-LON market is in seats – thousands daily, many of which are big and comfy – and that the corporate contracts drive more of the business than individual flying, I’m not all that surprised that these carriers struggled. Ironically, choosing less popular routes might have actually let them be successful, as would operating smaller or more efficient planes (like PrivatAir).

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.