Silverjet Share Discussion Threads

[i am myself2] 22/5/2008 14:31

Investing at the end of the storm can be profitable as the weakest airlines are taken out and share prices are low. It looks like we are just at the start of the economic storm. American airlines are cutting internal US routes. Crossing the pond is still good for them and is unlikely to be cut. It will be like a perfect storm for airlines. Fuel could rise another 50%, passengers could fall and those who do fly will expect cheaper fares.

The new investor should writeoff their £2.4m and walk away.

[drewz] 22/5/2008 01:42

American Airlines in huge distress over the pond tonight and cutting back its operations savagely.

Airlines cannot stand these fuel price levels. They are between a rock and a hard place. They need to put prices up sharply to preserve workable margins but then customers will defect in droves and they will end up flying too many expensive empty seats.

Why anyone would choose to be invested in any airline through this economic storm defeats me.

[i am myself2] 21/5/2008 14:53

Why do they not tell the shareholders?
It seems 3 bosses gone and others moved up to fill in.
Were they pushed or have they run away?
The airlines are going down fast so it could be worth people getting new jobs before it all goes down.

The news flow from silverjet is very limited. My guess is total passenger numbers will be down a few hundred in May but the load factor will be up as they have only 2 planes running at the moment. The load factor will then decline over the summer.

[bammbamm] 21/5/2008 14:51

Would these be positions that the new investor will occupy?

[stluke] 21/5/2008 14:48

What i was getting at is that there has been no big loss of staff i.e cost cutting but just movements still a full team in place, sorry for not being clearer but again a negative picture being painted by some as usual.

[drewz] 21/5/2008 14:18

Err, looks like they were sacked, stluke.


News - 20/05/2008 - Silverjet replaces three directors


All business airline Silverjet has restructured its management team following the injection of $25m of new money by UAE investment fund Viceroy Holdings.


Tamarah Khatib, former head of global online marketing, takes over the key marketing role from Anna Lamont, becoming head of global marketing. Georgine Sobling, until recently head of product and service development, takes over the key customer experience role from former BA man Martyn Bridger. Bill Lowe, formerly IT support manager, becomes head of IT, taking over from George Henderson, who had previously worked for Opodo.


Tim Buckman, formerly head of US sales takes on a new role as head of global sales as part of the restructuring.


Lawrence Hunt, Silverjet's chief executive, said: "The new investment means that Silverjet is now well placed, both financially and strategically, to exploit the opportunities which exist in the airline and all business class market – a market which we now dominate. This is a very exciting time for Silverjet and we are currently restructuring some of the key roles in the company to reflect the new investment and to ensure that Silverjet continues to grow from strength to strength."




Silverjet, the all business class airline, has parted company with its global sales and marketing director Katherine Gershon.
The airline has also carried out a restructure of its sales, marketing and customer services team.

[stluke] 21/5/2008 14:12

All rubbish again, they have not left they have just all got new job titles and shifted around slightly there is no big cull of staff in fact they are taking on new management!

[reefseeker] 21/5/2008 14:03

Thanks for the clarification and I agree with the thrust of your observations, that is that there appears to be major changes in the SIL management team.

This cull is not consistent with the bull case of a major cash injection and an expansion of ops.

[i am myself2] 21/5/2008 13:54

You are correct that they still have 5. I was looking at non-board members.
It seesm the board have got rid of 3 out of the 5 top mangers who are not on the board.

I expect all the other of the airlines staff will go sometime this year.
gone are:-

Martyn Bridger, Customer Experience Director

Martyn spent 24 years at British Airways plc, culminating in 2000 in his final role as Head of In-flight Service for the entire British Airways fleet. Since then, Martyn has provided strategic, product and service consultancy to a number of international airlines, including Qatar Airways, Emirates Airlines, United Airlines, Siberia Airlines, Etihad Airways, Air Arabia, Northwest Airlines and easyJet.

Katherine Gershon, Sales & Marketing Director

Katherine joined Silverjet from Thomas Cook where she was Director of Multimedia Sales, with responsibility for operations and sales generated through Thomas Cook's TV, dotcom and call centre businesses. During her time at Thomas Cook she launched Thomas Cook TV and turned around thomascook.com to become a leading online travel agency. Prior to Thomas Cook, she has 8 years management consultancy experience advising airlines, travel companies, cruise lines and hotel groups in Europe and the US on strategy and innovation.

George Henderson, IT Director

George has 18 years of IT strategy, operations and delivery experience, 10 of which have been in online travel. He joins Silverjet from Opodo, the European online travel agency and was a member of the original management team. At Opodo for over five years, he held roles in technology, operations, and corporate development. Prior to Opodo, George worked for another online travel agency, dreamticket.com and Kuoni, the leading long-haul tour operator.

You can see how the page looked in the google cache for a short while



I think a management diagram would be useful.

[reefseeker] 21/5/2008 13:35

I Am Myself - I've generally agreed with your posts up to now but your latest missive looks like a pile of poo. Only 2 exec directors!

Count 'em;
Lawrence Hunt, Chief Executive Officer
David Fleming, Technical and Operations Director
Martin Lynch, Finance Director
Paul Moore, Licensing Officer
Glenvil Smith, Company Secretary and Legal Counsel

Looks like enough suits for a company this size.
Source; company website 1pm May 21.

Please therefore amend your erroneous post.

[i am myself2] 21/5/2008 11:55

The share price is still falling in thin trade. Other boards have reported that the they have lost most of the management team. They only have 2 executive directors left on the website.

Elsewhere it is reported that buisness airtravel has dropped sharply. SIL is now trading around 20% the price offered to the new investor. The deal has not yet been approved but they will have lost around £0.8M

[i am myself2] 15/5/2008 11:21

Today the share price is back at its lowest ever level and 2.5p below the price to be paid by the new investor. This show that the market has no faith in the long term future of SIL. Also why would the new investor pay 17p per share when they are being sold at around 14.5p. Most people reading the latest circular from SIL would work out that they have burned £22m in about 5 months. They have already asked for over £2m of the new money so they can keep trading. It is clear that Mr Hunts statements about being near cash flow break-even were very mis-leading.

[i am myself2] 14/5/2008 17:07

It seems the last £22m has been spent over a period when they carried around 50,000 passengers. That is a negative cashflow of about £440 per one way passenger sector. They have now started a summer sale!

The new no-EU investor cannot invest much more within owenership limits.

they are doomed in 4 months is my view

[jamesclives] 12/5/2008 22:38

hi chaps....

i dont hold here, but found this article which you might wanna look at regards SilverJet-


May 12th 2008

[i am myself2] 12/5/2008 09:56

The circular to shareholders show how dreadful the December to March was for SIL.



Their income was £7.3m below target, closing flyjet cost £2m extra.

"The Group has also been impacted by increases in maintenance, marketing, fuel and other costs relative to its earlier projections."

Suppliers have also wanted paying promtly which as casued cash flow problems. It seems Silverjet has already asked for £2.4 of the loan so it can pay them.

my guess is they have lost between £15m-£22m in the 6 months to March 2008. The £11.7m net raised will last until september in my view.

[i am myself2] 08/5/2008 15:46

I know - In March they carried an average of 351 pax per day and April it was 353. Silverjet are very good at spin but the real rise in pax has been very slow. The mess at T5 and end of EOS should have made more of an impression. Fares for new bookings are likely to be up £50 each way but many will have booked sometime ago.

Non-EU funds cannot take total non-EU ownership past 50% due to CAA rules. If it was not EU owned then it would have problems flying to US from UK under open sky rules. It still looks like Silverjet will fail at the end of the summer. The fuel cost is going up even more, its Airport departure tax doubles in November and in august AA start a second Stansted to JFK. At some point they will have to admit how much they lost in the 6 months up to March 08. It must be a fair amount of the £22m they raised. If the shareprice keeps falling the new inverstor will not want to pay 17p/share.

[generalmac2] 08/5/2008 15:20

IanMyself

There is one day less in April than March so if you average out the numbers they actually carried slightly more passengers per day in April than March. Not significant but it burns your headline !!!

[drewz] 06/5/2008 22:08

Broker Daniel Stewart, which retained its 'sell' stance and 0p price target for the shares, commented: "There will be widespread relief that the first part of this subscription has been agreed but we remain sceptical about the prospects for Silverjet and we are still in the dark on a number of key issues - principally the level of losses for last year, the current state of the balance sheet."

[i am myself2] 06/5/2008 14:24

In April Silverjet carried 10,594 single fares. This was 291 less than March. The flew 159 sectors which was 9 less than March but March did have 1 more day.

Their new investor is not well known and appeared from nowhere. £12.7million will just go in a few months as it is clear the airline is using up cash. Silverjet have given no guidance as to what happened to the last £22m but it did not last well. Many of the biggest rampers of the share have now sold up. The higher fuel costs are here to stay and higher fares would reduce loading. Starting another route would burn millions and the first ones are not yet profitable (and maybe never will be).

With T5 mess and EOS/maxjet going under 67% full is dreadful.

[bammbamm] 06/5/2008 08:40

Harry,
You are correct. I was only trying to explain the theory.

[harry limelight] 06/5/2008 08:03

Tanking fuel is used often by many airlines but it is not quite as simple as you allude to. As rule aircraft burn an extra 5% per hour of the tanked fuel so often it is not worth the effort. Far better filling the holds with high revenue freight but thats another story.
It would be great to see SIL succeed as I have several friends flying for them but they are trying to poach first /business passengers from BA,Virgin and Emirates and we know "fighting fair" is not an expression we hear very often in Aviation.

[bammbamm] 05/5/2008 19:09

I am myself2,

That is not how it works.
Tankering fuel means loading exta fuel than is needed because it is cheaper to buy it at that place rather than at the destination and not landing somewhere to pick it up en-route. British Airways do it all the time when flying to certain African destinations. EasyJet and RyanAir do it when flying to certain East Europe destinations.

A standard 767-200 has a range of 6000 miles, luton to both newark and dubai is about 3500 miles, so they don't need all their fuel anyway. In theory they could fill the tanks in dubai (if it is cheaper there), fly to luton and then make a smaller fuel uplift and fly back to dubai or even on to newark.

I agree that you cannot charge a lot more as oil rises and they are struggling enough as it is. If it reaches $150+ barrel there will be a major correction in the worldwide airline industry.

Regards

[i am myself2] 05/5/2008 17:39

Takering fuel is only viable on short haul as it would cost a fortune to make extra landings just to get fuel. The current planes need almost all their fuel to make it to Newark anyway. Having said that it may be worth stopping outbound from luton to get extra range and reduce airport departure tax.

oil is back around $120/barrel. A doubling of oil does not mean you can just charge a lot more as the market size drops as the price rises.
Silverjet seems to have carried very slighly less passengers in April than March but is flat when the extra day is March is taken out. The extra £22m last winter has been burned and the next £12.7m will be as well. Much of the new money is debt that carries interest and has to be repaid.

I have know they were burning the £22m when others were in saying all was Ok.