Flyjet to cease flying…

Probably the worst kept secret in the industry but officially announced on the Silverjet site today…

http://www.flysilverjet.com/media-information.aspx

Silverjet plc (‘Silverjet’), the exclusively business class, long haul airline, announces that it does not intend to secure further aircraft when the leases on the two Boeing 757 aircraft operated by its wholly owned subsidiary, Flyjet Limited (“Flyjet”), expire. Flyjet’s charter flights will therefore cease operation from 31 October 2007.

Silverjet acquired Flyjet on 2 October 2006, securing the use of a leased Boeing 767-200. The acquisition enabled Silverjet to successfully commence commercial flights to New York in January 2007, just nine months from flotation and six months earlier than would otherwise have been possible, which the Directors estimate has brought forward net revenues in excess of £3million.

Flyjet’s Boeing 767 is leased significantly below current market rates and the Directors estimate Silverjet will save £3million over the duration of the lease compared to current market lease rates. As part of the acquisition Silverjet also acquired its Air Operators Certificate, operating licence and a world wide route licence, avoiding significant set up and operating costs, including wet lease costs estimated in excess of £10million over a 3 year period.

In addition to the Boeing 767 aircraft, Flyjet leased two Boeing 757 aircraft until November 2007 and January 2008 respectively, which are chartered to various tour operators until October 2007.

The charter airline industry is undergoing a challenging year due to the ongoing consolidation of the big four tour operators, the decline of the traditional package holiday market and excess capacity from the low cost carriers. The core business of Silverjet is its all business class service and the Directors see insufficient returns from continuing to offer a service in the charter market.

The Directors estimate that the cost of withdrawing from the charter business will amount to approximately £300,000 in addition to the cost of the aircraft C-checks required on the scheduled return of the Boeing 757’s to the leasing company.