Silverjet sacks all employees after bid to find rescuer fails

Sunday, June 15, 2008, 8:58 by Aviation Correspondent

Silverjet, the British all-business class airline based at London’s Luton Airport, which had suspended its operations on May 30, 2008, has decided to sack its employees after all its efforts to find a buyer failed. The airline – which had operated services to Newark Liberty International Airport, New Jersey, the United States, and Dubai International Airport – was grounded as it could not make ends meet in the face of soaring fuel prices.

Silverjet, founded in 2006, aimed to sell business-class seats for one-third of the price of traditional carriers, but it could never make any profits.

The carrier began flying between London’s Luton Airport and Newark Liberty International Airport, New Jersey, the United States, in January 2007. Its London-Dubai daily service started in November 2007.

Silverjet’s offerings included private terminals, onboard women-only toilets and gourmet menus from London restaurant Le Caprice. Its 3 Boeing 767 aircraft were fitted with 100 flatbed-seat, less than half the usual capacity of a Boeing 767.

Silverjet was one of the business-only airlines set up to take advantage of the ‘Open Skies’ agreement, which lifted restrictions on other than four designated airlines to operate trans-Atlantic flights.

The airline became involved in a serious dispute investment bank Daniel Stewart & Company in January 2008, after a report advised investors to sell shares “at any price” because the airline was “doomed to fail.”

The website guardian.co.uk reported that Kingplace, managed by Swiss investment trust Heritage Cie., had agreed, on June 10, 2008, to buy Silverjet. The price that Kingplace offered to buy Silverjet was never disclosed.

“The deal probably fell through,” an aviation analyst was quoted as saying, “because the United Kingdom’s Civil Aviation Authority (CAA) requires carriers to have enough cash in reserve to guarantee operations. Meeting the Civil Aviation Authority’s requirements might have been a hurdle too far.”

Begbies Traynor Group, a United Kingdom-based company specialising in corporate rescue that was responsible for disposing of Silverjet’s assets, said in a statement that “Kingplace had been unable to conclude the purchase.” “As a result of the unusually complex negotiations with third parties, Kingplace is no longer in a position to acquire Silverjet as a going concern. So we had to make the entire workforce formally redundant, in line with our legal obligations,” the statement added.

Silverjet employed about 300 people, and almost 10,000 customers were affected when it stopped flying, according to the Civil Aviation Authority.

Shares of Silverjet were suspended on May 23, 2008, after an investment pledged by Viceroy Holdings, based in the United Arab Emirates, did not come to pass.

According to media reports, Silverjet had raised around 72 million pounds in its initial sale of shares, additional stock offerings and loans after it was founded in 2006.

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