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A few years ago, Warren Buffett assessed the airline business this way:

…if a capitalist had been present at Kittyhawk back in the early 1900s, he should have shot Orville Wright. He would have saved his progeny money. But seriously, the airline business has been extraordinary. It has eaten up capital over the past century like almost no other business because people seem to keep coming back to it and putting fresh money in.

Sure enough, fresh money is coming into the business.

Silverjet, the latest entrant (alongside Maxjet and Eos) in the London-New York all-business-class space, successfully raised £25 million (approx. US$46.6 million) in an IPO. 75% of shares went to institutional investors, with management retaining 19%. While funding does not guarantee that the airline will actually fly, it’s certainly far more likely.

The company’s goal? To “offer passengers ‘the same level of service as EOS but at the same price as Maxjet.’” Flying from the London-area Luton airport, served primarily by discount airlines, Silverjet promises speedy check-in, as late as 30 minutes before departure.

Unlike Maxjet and Eos, Silverjet states that it plans to expand outside the transatlantic space:

The airline has already identified 30 routes that would suit the airline’s business model and started the licensing process for three long-haul routes outside North America.

We’ll be watching. But, perhaps like Warren Buffett, we won’t be buying the stock.

Washington to London for $499 roundtrip in business class??! It’s true. If you can leave Washington-Dulles on May 6, and return from London-Stansted May 7, 8, or 10, all-business class Maxjet will take you. Apparently valid on these dates only. I just checked, and seats ARE available. Go to the Maxjet homepage, and be sure to enter the promotional code “MADMAX” before clicking “next.” But hurry, these fares are likely to sell out faster than you can say “Independence Air.”

via FT

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.

Travelers hoping for an empty adjacent seat on startup airlines MaxJet and Eos Airlines are in luck. The all-business class carriers are flying rather empty thus far, according to the Times of London.

The numbers aren’t broken out, but the two airlines combined to show a 32% load factor, i.e., two out of three seats left empty. MaxJet’s fleet consists of Boeing 767-200s configured for 102 passengers, while Eos flies 757s outfitted with 48 seats. Maxjet’s CEO, Gary Rogliano, charges that competitor Eos’ planes are only carrying 5 to 10 passengers per flight — a load factor between 10 and 20%, if true. Compare this to the major airlines’ load factors, which hover near 80%.

Rogliano also argues that the winter is a slow travel season — but this is primarily true for leisure travel, not business travel. The summer is when we really see business-class bookings across the Atlantic drop, and when the airlines offer business class sale fares.

Maybe this is where the real Maxjet business model lies: high-rolling vacationers, and not business travelers at all. While the MaxJet model has its flaws, its sale fares are still a great deal for high quality inflight service. Perhaps they’ll survive on tourist bookings, if they can stay aloft.

Flying from New York to London? MaxJet is selling their all-business class flights for less than competitors’ coach fares: $750 *including* all taxes. As I’ve posted before, it’s not a state of the art business class experience, it’s flying to Stansted instead of Heathrow or Gatwick, and you’re not earning miles toward status or those tickets to Tahiti. But it’s still a really good deal.

Departure or return has to be on a Tuesday or a Wednesday, though. Book by March 27, fly by December 31. Use Promo Code JFK06. Details here.

Via Airfarewatchdog.

Last week, I mentioned MaxJet and Eos, two new all-business class carriers on the New York to London route. Both fly to Stansted Airport, instead of Heathrow or Gatwick. MaxJet is also expanding to the Washington-Dulles to London-Stansted route starting March 15.

The lowest NYC-London fare (with restrictions) on MaxJet comes to $1492 with taxes. (Eos’ lowest fare is currently $3048, and requires a weekend stay and 30-day advance purchase.) According to a recent New York Times profile, both players are aggressively courting investment banks and other large premium-cabin customers.

But the MaxJet seat may be a deal-breaker for the business traveler. Sure, it’s more comfortable than coach, and this glowing (and detailed!) trip report of the inaugural flights describes a nice cabin service.

But the seat has one major weakness: No power. This means you’re at the mercy of your laptop battery if you plan to do any work on the flight. Eos, in contrast, offers regular AC power outlets at their seats. All the major airlines offer power at their seats, though they often require an adapter.

This is probably more important on the west-bound segment than the overnight east-bound trip, but even so, how many investment bankers do you know who AREN’T working inflight?

MaxJet seems to be trying to position itself at the upper end of coach and at the bottom end of business class. But it doesn’t sound like they really mean business.

In recent weeks, airlines have added destinations and frequency on trans-Atlantic routes. USAirways announced new destinations in Lisbon, Milan, and Stockholm, while Delta added Dakar and Johannesburg.

Plus, all-business class startups Maxjet and Eos Airlines have opened for business. (Both of these carriers fly solely from New York’s JFK to London’s Stansted Airport, not to the larger Heathrow or Gatwick airports.)

Are lower fares coming for the busy summer tourist season? Don’t bet on it.

At least not yet, and not in coach. Demand has been strong, and capacity has not reached saturation levels. For example, Continental raised capacity 16.8% last year, but increased revenues 26.6%.

Where you might actually see downward pressure, especially in the summer, is in premium cabins.

Get to know Z fares.

When you buy a plane ticket, it books into a fare basis code, or “bucket,” which starts with a letter. (These letters vary by airline.) Full-fare, refundable economy fares, for example typically start with the letter Y. First class is usually F, P or A, and business class is commonly C, D, or J.

“Z” fares are commonly discounted, nonrefundable business class fares. They are common on trans-Atlantic routes in the summer, when business travel (and paid business class) tends to subside and tourist travel ramps up. Sometimes, they will cost little more than an economy class ticket. Last July, for example, I recall an economy fare to Germany for nearly $1300. Ouch. The Z fare for business class: $1600.

Bottom line: If you’re looking for summer travel across the Pond, and prices seem high, be sure to separately search for both business and economy fares. You might just find a premium-class deal.