Silverjet outline plans
19.05.08
Luton Airport airport based all business class airline Silverjet is in talks to replicate its premium-class model through franchise deals around the world as it treads cautiously in expanding its business, the airline's CEO said in an interview with Forbes. Lawrence Hunt also said the airline has been approached by 'multiple potential buyers', although the private investment fund that recently injected much-needed cash into the UK carrier is not among them.
Mr Hunt said Silverjet is moving ahead with plans to expand its core business with the aim of launching a new route every 6 to 12 months. The airline currently flies to New York and Dubai from its home at Luton Airport, and is considering possible next destinations including Los Angeles and San Francisco, as well as cities in South Africa and India.
He said: ‘We see the opportunity to grow in all sorts of places and all sorts of ways. The issue for us is not running before we can walk.’ Some industry observers have suggested that this - aggressive expansion - was a bigger factor in the failures of US rivals Maxjet and Eos than rising fuel costs and weakening demand in the face of an economic slowdown.
Late last month, Silverjet said it had secured an investment of up to $100m. The airline last week identified the investor as Viceroy Holdings LLC, a closely held investment firm based in New York and Dubai.
Mr Hunt said Viceroy, which injected an initial $25m in exchange for a 28% stake in Silverjet, has not made an offer to buy the company outright. Other would-be buyers have expressed an interest, however. He did not say how many offers are on the table, although he did say discussions were ongoing, adding: ‘If they make what we think is a sensible offer, we'll have to take it to shareholders.'
Silverjet is filling enough seats to cover its expenses on many flights, but has yet to turn a monthyl profit, Mr Hunt said. That has left the airline looking for ways to grow its business while keeping costs and risk in check. One option being considered is a franchise model that would offer Silverjet flights in a number different regions, including booming countries such as India, China and the United Arab Emirates, as well as more established markets like the US and Europe.
The airline is in talks with a number of local investors in its target markets, Mr Hunt said, and he aims to have at least one Silverjet franchise up and running within the next 12 months.
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