Silverjet threw in the towel today. Ceasing operations after valiantly attempting to stay afloat. They needed but $5 million to keep the operations open but after being refused a lifeline loan and the deal with Viceroy falling through there really was no chance.
There is an old Axiom if you do business in the GCC. An LOI is worth nothing. Only the money in the bank is the ultimate test. As one of our friends put it, precision for a Brit and a Yank is about 90% done. In the GCC it is only about 50%. Clearly this was a lesson that Silverjet’s management had not quite learned. There will be a lot of mad people out there now, individual investors and those who plowed money into it.
The demise of Silverjet follows EOS and Maxjet. Eos actually had quite some months of operation in cash before they needed their injection . But despite everything they knew the situation was hopeless. In the GCC this model could have worked with newer aircraft and a smaller number of seats based on frequency. However the low cost high end airline in Saudi Arabia Al Khayala soldiers on but it is a short haul carrier offering service inside the 3 major cities and erratic service to Dubai. We believe that like its sister company NAS Air it is not making money.
So L’Avion is the last one left. If they have any sense they will seek protection under the wing of Air France. PrivatAir on a ACMI basis seems to be doing just fine.
Alas poor biz class model – we hardly knew thee.
Cheers
Timothy
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