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.

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.