Silverjet Share Discussion Threads

[bygadsir] 30/5/2008 10:16

REST IN PEACE

bygadsir

[drewz] 30/5/2008 10:04

JC, not very amusing at all for the 300+ staff who will lose their jobs, or the ticket-holders and shareholders who will lose money.


From Times Online

May 30, 2008

Silverjet ceases flying as cash runs out

Company failed to raise cash in time from unnamed investor
Robert Lindsay

Silverjet, the business class-only airline, this morning admitted it no longer had the cash to continue flying and suspended operations.

"It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect," it said.

The last flight took off at 7.30 this morning from Luton on its way to Dubai.

Last night Silverjet said that its would-be Abu Dhabi investor Viceroy had still failed to provide it with the $5 million cash loan it had promised under a rescue deal and that it was left talking to just one potential rescue investor.

Related Links
Silverjet flying on empty as finances hit red
Silverjet airline fights to stay in the air

This morning it added: "Silverjet continues to be in discussions with investors interested in supporting the business, however, it has yet to conclude such discussions to its satisfaction."

The advance was required as a matter of urgency since its working capital reserves were limited. It is understood it did not have enough cash to pay for the fuel for any more flights.

A spokeswoman said she believed founding chief executive Lawrence Hunt was still talking to the investor, but agreed that the future looked bleak now the airline has no income coming in.

It employs some 330 people in Luton. Silverjet said customers who have booked flights via credit card should be able to receive money back from their credit card company or from their travel agent. But others are unlikely to get their money back.

A week ago Silverjet's shares were suspended when the airline revealed that Viceroy was not handing over the cash which it needed urgently to keep flying. At the time the airline confirmed that it remained in talks with one party which was interested in investing in the company.

The Luton-based carrier, which offers business-class flights to New York and Dubai for about one third of the price of a British Airways ticket, said last year that it was losing about £1 million a month. This figure is rumoured to have doubled in recent months. Silverjet's share price has fallen from 120p at flotation to 13½p before its stock was suspended.

[jamesclives] 30/5/2008 09:54

695:

LOL !

[drewz] 30/5/2008 09:44

They gave it a good go. All credit to them. It was a breath of fresh air.

They managed to serve real 'restaurant' quality food in the air, unlike the overcooked reheated pap you so often get from mainstream business-class carriers these days.

And they served you real café lattés in proper mugs,like Starbucks, not the vile brown fluid BA serve up.

It wasn't over-flash or fancy, but it was good solid refreshing quality.

Such a shame they could not get enough people to try them to make it viable.

They will be missed.

[weemonkey] 30/5/2008 09:34

have been going through the RNS's looking at the sorry decline

there are so many lessons to be learned here.

not least that ceo's do not tell the truth. having said that is it their job so to do? Do you know I do not think it is. How do investors spot what is true and what is not? less than a month ago the CEO was still making very positive noises - making strenuous rebuttals of all negativity. Well that is his job - to fly in the face of the mounting evidence that said that all was not well. That is absolutely the job of the CEO in these circumstances.

Gordon Brown is in effect the CEO of the uk. does he tell the truth? no absolutely not. the facts are that Uk plc is facing very grim times. and again it is not his job to tell us that this is the case. companies and economies run on confidence. New ideas need confidence and must try to fly in the face of the evidence that they may not work. Without that confidence they stand no chance right out of the starting gate. With confidence something new and wonderful may be achieved. there is always failure when you try something new. but occasionally great change is brought about.

what investors have to do is compare statements from CEO's with the market and operating conditions in which companies operate - then make a judgement.

Poor old silverjet. Gosh I so nearly invested in you. I was itching to - absolutely itching to. Peter Lynch's words from 'One Up On Wallstreet' rang in my ears (thankfully) - "If you are not sure about an investment then tune in later".


And as Mr Lynch also points out - when companies go under it does not matter whether you invest £10k at £1.50 a share or £10k at 14p a share you still lose you £10k.

I was also very lucky - I had a friend that flew to New York with them in January. She said the flight was half empty and that the atmosphere on board was like being in newly opened restaurant that is doomed to close. Wtih the staff slightly too eager to please and yet everything is not quite good enough. That piece of info on its own stayed my hand.

this was great idea that hit very bad weather - A huge and unforseable spike in the oil price and a general economic downturn in the principal markets in which the company set out to operate namely the USA and UK.

I feel very sad for all concerned.

[generalmac2] 30/5/2008 09:04

R.I.P along with my 20K.

[whiteboard] 30/5/2008 08:26

Yep, could this be the final nail.

RNS Number : 5835V Silverjet PLC 30 May 2008

30 May 2008

Silverjet plc (" Silverjet")

Suspension of operations

Silverjet announced on 23 May 2008 that it had yet to receive the proceeds of the US$5.0 million drawdown request made under its loan facility with Viceroy Holdings LLC ("Viceroy"). It also announced that its working capital reserves were limited and that advances under the loan facility were required as a matter of urgency. Silverjet has not received any further sums from Viceroy.

Silverjet continues to be in discussions with investors interested in supporting the business of Silverjet, 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 last service of Silverjet was the flight from Dubai to London Luton, which departed at 7.30 am (BST) this morning.

A further announcement will be made shortly.

Advice for customers

Information for customers is available on Silverjet's website, www.flysilverjet.com.

Customers should seek refunds of unused segments of tickets from the point of purchase (ie credit card or travel agency).


ends -

[bammbamm] 30/5/2008 08:19

Flying operations suspended 30/05/08 0730 ............

[bammbamm] 29/5/2008 20:03

Silverjet directors recommend voting against the share allocation to Viceroy at tomorrows EGM.

[bammbamm] 29/5/2008 10:29

From a contact, payday was the 25th.

[i am myself2] 28/5/2008 14:05

Any firesale will be after the firm goes under. The firm is so damaged that any new holder would wish to take on the firm without existing debt, shareholders or contracts.

If Ryanair wished to start a service it would get Boeing to give it new planes at far below market price. Ryanair buy planes at the darkest hours of the airline industry. we are not there yet. BA are having brand new A318s for their service to newyork from london city airport. With the current oil price the old 767s are cas burners

Some people seem to think that Viceroy can be sued for not transfering the money. I am sure that any memorandum of understanding would have get out clauses to all Viceroy to escape. If not I could see no logic in Viceroy signing. The shares dropping about 20% below the deal price would seem a good reasion to backout.

When I ran my excel spreadsheet over the firm it showed they have spent about twice as much as they have earned.

Silverjet are unlikely to have the money or the time to sue anyone. If Friday is payday then it is also likely to be the end of the cash in my view.

[2020hindsight] 28/5/2008 13:10

Surely Ryanair and the like have got their own problems ?

[weemonkey] 28/5/2008 11:44

nice target for someone like ryanair if there is a fire sale

then they could do bucket shop second class and cheap business

bet they have put their sliderules over it .

If not snapped up by someone like them then you know that this is a goner

[stluke] 27/5/2008 12:59

Not to worry 2020, i really do hope you get to have that flight with SIL, i imagine things should be clearer over the next few days, however this was always going to be part of the problem with the finance back up in the air again travellers dont like uncertainity and you cant blame them.

[2020hindsight] 27/5/2008 12:34

Sorry, didn't make myself clear enough ! Nothing's stopping me at present ... and I honestly hope nothing will - not only because I might lose some money, but also because I honestly like their business model.

I've bought BA tickets just in case (fully refundable) but have no intention of using them if I have the SilverJet alternative.

[stluke] 27/5/2008 12:27

What is stopping you flying with them 2020, just because the shares have been suspended does not mean operationally they are not still trading, surely the first port of call would be to phone SIL up and confirm situation.

[2020hindsight] 27/5/2008 12:15

The really annoying thing is that I changed my BA flights back to the UK next month and rebooked on SilverJet once the last financing had been sorted out. I thought (perhaps rather stupidly with hindsight) that it would be safe. One week later and I knew better.

Worse I went for the cheapest flight (ie no refund).

Worse still I bought it on an HSBC Dubai credit card .. and I suspect the credit protection out here will be zip.

Would have loved to fly SilverJet to experience it once. Ho hum.

The idea is really good - VIP terminals at Dubai and Luton, no queues, no hassle and I suspect quite a demand judging by the load factor on the BA flights from Dubai. Just a shame that the fuel is the killer.

[weemonkey] 27/5/2008 11:49

what a shame.

was a great idea and good for the consumer. deserved to succeed

never bought but was very tempted.

think is going to be a case of RIP

[drewz] 25/5/2008 00:58

And:




Oil price rise has left Silverjet leaking money

Silverjet on the brink as funding lifeline fails
Then there were none. Ever since Maxjet and Eos crash landed into bankruptcy, the writing has been on the wall for Silverjet, their fellow all-business- class airline.

Silverjet is still airborne, but only just - and it's energetic boss Lawrence Hunt will have to pull out a stunt of Red Arrow proportions to save it. Only last month he thought he had secured an £8.4m lifeline from Abu Dhabi investor Viceroy. But when he came to draw the first $5m instalment, the best that can be said is that the cheque is still in the post.

No one should blame Hunt. His business model, which aimed to offer an up-market product that not only undercut the established big boys like BA but rivals like Eos too, was not in itself flawed. But when he launched, oil was around $50 a barrel - now it is $131. Fuel alone must now be at least half Silverjet's cost base. No thinly capitalised start-up airline can stay airborne when gravity is pulling that hard.

Even airlines with strong balance sheets are struggling in the current market, which makes it so much harder for Hunt. To an extent he's always been winging it, which explains why he has been lurching from one funding crisis to another. With oil where it is, its tricky to see why anyone would put more cash in the tank when there's so little prospect of a return.

Silverjet has had a few tentative suitors in its short life. Unless Hunt produces one smartish, this story is heading for a not very happy ending.

[cyberpost] 23/5/2008 20:33

Analyst brings Silverjet down to earth
January 14, 2008 3:40 PM

Silverjet, the business class airline that flys from Luton, has come down to earth with a bump. Its shares have slumped 28% to 35.5p after a savage sell note from broker Daniel Stewart.

Analyst Mike Stoddart began coverage of the company today - the directors may wish he hadn't bothered - by saying: "Our target price is nil. We would sell at any price."

There's more - 32 pages in all. Stoddart goes on: "Its low fares have failed to generate the load factors needed to make any money. While it posted an 80% load factor for August 2007, this was achieved, at least partly, by taking bookings for two flights per day and, as a consequence of unforeseen maintenance work, operating only one.

"Now that frequency has been doubled on the Newark route and the Dubai route has been launched, load factors have collapsed to just over 50% and we have yet to see how things will look for the seasonally quiet months of January and February. As with other UK airlines, it recently launched a January sale in order to boost demand.

"At the current blend of oil price and exchange rate, we estimate that jet fuel will be costing Silverjet about 23% more per rotation (or round trip) than the average it experienced in half year to September 2007.

"Overall, Silverjet's current performance - average return fares of about £1,180 and load factors of 52.8% - is so far adrift of what is required that, in our view, the business is doomed to fail unless something changes - significantly and rapidly. With these figures, each return flight will be earning revenue of about £62,300 and, with all-in costs of perhaps twice that amount, generating sizeable losses.

"As a consequence of all this, we expect Silverjet to produce a bigger loss in the second half than the first and more, substantial losses next year. It is difficult to be precise about the effect on cashflow because of the potential size of some of the working capital swings.

"The next test for Silverjet is whether, having done their due diligence, the Reuben brothers decide to convert their £10m loan to equity at 60p per share. Their last conversion date is 11th February 2008. Whether they do or don't, we consider that the company will need another equity issue in the next year or so simply to offset its losses and stay in business."

A buy note from Silverjet's broker Arden has done little to limit the damage. But for the sake of balance, Arden reckons: "[The seat sale] is helping boost passenger numbers in the seasonally quiet month of January but also providing a good base level of bookings for future months - around 70% of bookings last week were for February onwards. Whilst yields under the sale are below our forecasts for Silverjet, yields will be managed upwards as the planes fill following the typical low-cost model.

"The recent investment by the Reuben brothers is a significant and positive development which has yet to be reflected in the share price."

[cyberpost] 23/5/2008 20:30

looks like Daniel Stewart foretold it right !!




Silverjet slams dead man walking slur
Written by Sam Fountain
Wednesday, 16 January 2008

The second hit has been landed in a 'one-two' delivered recently to the region's business-only airline industry, this time from a brokerage report deeming Luton's luxury carrier Silverjet 'worthless.'

Hot on the heels of MAXjet's Chapter 11, filed just before Christmas, Silverjet has taken the next blow after the company's business model was attacked in a brokerage report.

Silverjet has strongly denied any truth to the report, released by brokerage Daniel Stewart – which gives the airline a sell rating and a target price of 0p – on the grounds that the company will suffer the same fate as MAXjet before the end of the year.

Shares in the company have regained some of their value lost since the 32-page report was released on Monday, partly aided by a contradictory report from analysts at Blue Oar Securities, which "rates the shares a buy with a target price of 130p," said a spokesperson at Silverjet.

The Daniel Stewart report, 'which contains numerous material mistakes and inaccuracies,' Silverjet said, questioned the luxury carrier's business model, saying that the increasing challenge in the market offered by the entrance of major carriers – such as BA and Virgin – and increasing fuel prices would cause the company to follow MAXjet's example and fold before the year's end.

Silverjet hit back, with news that it had seen record bookings from the US this week, and that the company, far from dying, was on track to showing its first profit before the end of March.

Chief executive Lawrence Hunt was quoted as saying that the current weakened state of the US economy might be a driving force behind ticket sales, with companies looking for new ways to cuts costs.

Hunt also believes that Silverjet's superior service and the fact that the company raised prices when fuel costs rose will allow it to succeed where MAXjet failed.

In response to the Daniel Stewart report, Silverjet said the analysis was flawed and identified three major points of contention:-

• The current average cost per rotation is £75,000 rather than the £135,000 quoted by the Daniel Stewart research note

• Liability for maintenance of £9.7m is payable over the ten year term of the lease and not the majority in the current financial year as stated by the Daniel Stewart research note

• The statement that Silverjet expects to be cash generative following the current financial year is based on operating five aircraft and not three as stated by the Daniel Stewart research note.

The brokerage firm defended its stance despite Silverjet's response to the report, saying that it was not surprised at the company's reaction since the report 'questioned the entire basis of their business model.'

Silverjet stands by its model, saying that the airline is in a strong financial position having just raised £22m and securing two new aircraft to be delivered by March.

A new Dubai route is also surpassing management expectations, according to the company, and "Silverjet remains very confident that it will continue to deliver on its strategy and revolutionise the way passengers fly longhaul business profitably."

[queeny2] 23/5/2008 20:22

extraordinarily enough all you had to do was look at viceroy's website to realise that they could be a shambles - i didn't think of it until today. it's actually quite funny (the website) unless you were invested of course.

[sambessey] 23/5/2008 13:34

I am myself2 has been spot on here. I don't know how anyone could imagine this company was ever going to get out of trouble given the current climate... This could be seen a mile off. I was never short or long, but it was so obvious it was all going to end in tears...