Reply To: EOS files for bankruptcyBack to Forum
The single greatest issue in all this is the oil price. Most of the models were calculated withan oil high of $95/barrel.
That figure is now at $120 and shows no sign of reducing principally because of instability in many oil producing countries, a refusal by the more stable ones to increase production and the very high demand seen in China and India.
This will not change.
Similarly, demand from business travellers is reducing as more and more non-essential trips are cancelled.
As Open Skies Agreement kicks in across the Atlantic, there are more and more ways of flying into LHR, and the opening of T5 has (aside from the initial chaotic week) eased the terminal strain at LHR such that passing through the remaining terminals, plus the new two cabin bag rule, make it much less stressful than it was just two months ago.
All of which pulls traffic back to the traditional carriers, who in turn have cut the price they charge their leisure pax (viz. the £1099 fare London-New York in BA’s Club World available in their April Sale).
I have flown SilverJet and they have a great product, and a USP of a private terminal. Their main problem is a lack of frequency to NYC, and a gas guzzling fleet of older 767 widebodies.
Interestingly, the collapse of MaxJetand EOS may push the price conscious business traveller into the arms of SilverJet. Also, both of those were US carriers, where the option of Chapter 11 bankruptcy is an attractive option at the first sign of a downturn.
Being British, SilverJet does not have this option, but is fully funded and having been established a while has a good team with which to weather this storm.
People do criticise the start point, but getting to Luton is very easy direct 25 minute train ride from the gleaming new St Pancras.
So would I book a flight with http://www.flysilverjet.com now? Much as I would like to, probably not if it was an advance payment, me paying flight. There are similar deals price-wise with major carriers now which make SilverJet and not earning any miles less attractive.
But for a turn up and go, fully flex ticket (available at a 20% discount using code AMEX20) there is little risk, and good travel insurance and payment by credit card ensure you are belt and braces protected.
And it is these fully flexible fares at which SilverJet is VERY competitive and also where it makes most profit. So for the full fare yet price conscious business traveller, getting across the Pond on SilverJet represents an attractive proposition.
Where SilverJet might suffer is not so much keeping in business – as it makes enough (just) to only make a modest loss which is not atypical for an aviation start up – but rather its ability to invest in new fuel efficient aircraft for the future. So the long term doesn’t look quite so rosy.
I wouldn’t write SilverJet off just yet. Just keep an eye on that oil price……