First it was Maxjet and Eos, the all-business-class airlines connecting New York and London, who introduced their service to compete against the major airlines. Now there will soon be another rival, if investors sufficiently capitalize upstart Silverjet in an IPO scheduled for May on London’s Alternative Investment Market.
Silverjet, which seemingly does not have a website as of yet, plans to operate 10 aircraft within three years, all with lie-flat seats. The primary route would be between London’s Luton airport and Newark. Like MaxJet, Silverjet intends to operate Boeing 767s.
But how much demand can there really be for airlines like this? Loads on MaxJet (which is also seeking to raise cash — $50M from hedge funds) and Eos aren’t great, though MaxJet optimistically sees the plane half full. Literally. Better than reports, but not great.
At the same time, the major airlines are lowering prices, offering greater flexibility, and slating for increased amenities. Plus, the power of the major airlines’ loyalty programs shouldn’t be underestimated. People really like collecting those miles…
This is getting ridiculous. We’ve now got business class service to Heathrow and Gatwick by the majors, plus Stansted and Luton on the startups. What’s next?: Will someone determine that London City airport needs nonstop business class service to White Plains or Islip?
I’d be very wary of investing my money in a new airline in such an already-crowded space.
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April 10th, 2006 at 7:33 pm
I’m really enjoying your blog, by the way; good information, admirable writing and frequent updates. Keep up the good work!
Like you I’m not sure that there is that much business for purely-business transatlantic flights, but if I had to back a horse in the race then I probably would go for one that were to be based at London City rather than Stansted or Luton. LCY is extremely well-placed for the parts of London where the target market work, whereas STN and LTN take time to reach. Admittedly you’re looking at using a tiddly little plane to fly from LCY, if there are tiddly little planes which can cross the Atlantic in the necessary luxury. I’d be tempted to go small rather than go big and purport the flight to be all-first-class rather than all-business – better to sell, say, 14 round-trips per flight at £4k each and have substantial occupancy than to sell twice as many at less than half the price with smaller occupancy and higher costs?
April 12th, 2006 at 12:03 pm
Thanks for the kind words!
I agree that LCY would be a sensible choice for an all-business (or all-first) airline, but with only a 1319m-long runway, shorter than the other London-area airports, the aircraft such an airline would use would necessarily be quite small. But for an ultra-luxury airline, smaller might be more desirable, anyway. It wouldn’t work for an econo-biz airline like Maxjet.
June 1st, 2007 at 8:13 am
[...] – Reduced-guilt flying now readily available for online purchase – Do we really need ANOTHER all-business class airline to London? – Silverjet IPO enables third London-New York all-business-class airline – Are open skies dirty [...]
October 16th, 2007 at 1:23 pm
[...] the latest entrant (alongside Maxjet and Eos) in the London-New York all-business-class space, successfully raised [...]
October 4th, 2008 at 6:34 am
Hi I am doing an assignment on all-business-class airlines and I would like to know why the airlines target business class passengers only through the most competitive route segment, London to New York. How do airlines segment their customers? How do they communicate to potential business class customers?
Any information regarding the above will be very much appreciated
Kind regards
Liezel
October 13th, 2008 at 3:06 am
Hi I am doing an assignment on all-business-class airlines and I would like to know why the airlines target business class passengers only through the most competitive route segment, London to New York. How do airlines segment their customers? How do they communicate to potential business class customers?
kind of similar to Liezel..
Any information regarding the above will be very much appreciated
Kind regards
kennith
October 13th, 2008 at 3:20 am
hi i’m doing a similar assignment to liezel.. it’s due for friday this week as in 17 october 2008, 4 days from now so i’m kinda in a time crunch…
why would an airline target business class passengers only?
how would an airline segment their customers? what basis do they use?
based on enviromental factors, what factors will affect the airline industry?
please help ASAP.. thanx
Kennith