Silverjet "doomed to fail" Reuters.

Quoted from http://www.Reuters.com

Silverjet CEO defends strategy after MAXjet failure

LONDON, Jan 15 – British business class-only airline Silverjet defended its strategy on Tuesday after one of its peers collapsed last month and a brokerage said it too was “doomed to fail”.

Rival MAXjet filed for bankruptcy protection after traditional airlines like British Airways competed more fiercely than expected last year and weakness in the U.S. economy kept business travellers at home. On top of that, fuel costs rose dramatically, and unexpected flight cancellations created costly problems of rebooking passengers onto other airlines.

Silverjet Chief Executive Lawrence Hunt said Silverjet would succeed where MAXjet had failed because it gave better service and had managed to put up prices when fuel costs rose, while MAXjet had kept them low to try and compete for customers. He said he was not surprised by the way traditional airlines fought back against new rivals like Silverjet, MAXjet and eos.

Brokerage Daniel Stewart questioned the airline’s business model on Monday and said Silverjet’s shares would be worthless within a year because it would run out of cash, causing its shares to fall by more than 14 percent.

Silverjet responded strongly, saying the report was inaccurate. It said it took 5,000 bookings last week and was on track for profit.

But the brokerage stood by its note, saying: “With prices as low as 401 pounds each way, 5,000 bookings could represent as little as 2 million pounds in revenue.”