Silverjet flights grounded
30.05.08
Luton Airport based all business airline Silverjet grounded its today flights after failing to attract new investment. Its last flight took off from Dubai for the UK this morning. The announcement that the carrier had ceased operations came after the failure to attract $5m (£2.5m) in new capital. Almost 10,000 passengers have been affected by the decision.
A statement by the airline said: ‘Silverjet continues discussions with investors interested in supporting the business, however it has yet to conclude such discussions to its satisfaction. It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect.’
The airline, established by chief executive Lawrence Hunt, operated flights between Luton and both New York and the UAE. But a combination of soaring fuel prices and a weakening economy has hit the business airline sector particularly hard with US rivals MAXjet and Eos going out of business in less than 6 months.
Mr Hunt said in a note to travellers on the Silverjet website: ‘We extend our sincere apologies to those of you who have travel plans with Silverjet in the future and at present. 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.’
‘We are working with new investors and are prepared to inject new funds so we can recommence operations. If we are able to achieve this, we will make an announcement as soon as possible.’
Silverjet has hoped to obtain fresh funding from Dubai based Viceroy Holdings but the promised $25m failed to arrive. The airline previously said that its cash reserves were limited and that advances under the proposed loan facility were required ‘as a matter of urgency’.
The airline started services in January 2007 and operates three aircraft. It launched a summer sale just this week. However, after its shares were suspended a week ago, its days looked numbered.
The Civil Aviation Authority (CAA) said it estimated that up to 10,000 customers would be affected by the flight stoppage, with both British Airways and Virgin Atlantic offering to carry Silverjet passengers (for a fee, of course).
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