Struggling Silverjet thrown a lifeline

Last month, struggling airline Silverjet revealed it was in takeover talks which sparked fresh concerns about the airline industry.

Oasis Hong Kong Airlines announced it was to stop flying and applied for a voluntary liquidator. US carriers including ATA Airlines, Aloha Airgroup and Skybus Airlines all ceased trading in March.

More recently, EOS and Maxjet revealed they would cease flying.

However, Silverjet has revealed it has secured a $25 million (£12.7 million) investment to keep the business class airline flying.

The investor, who has not been named, is set to invest $25 million initially, acquiring a 28% stake in the group.

The investor also intends to invest up to an additional $75 million (£38.1 million) to expand the brand to the Middle East, the Far East and Africa.

A full takeover of the airline is still possible.

Should the deal collapse, alternative funding would be required, said Silverjet. It is now the only all-business transatlantic airline operating after rivals EOS and Maxjet ceased flying.

Silverjet is based at London’s Luton Airport and flies to New York and Dubai and has been struggling with losses since it launched in 2006.

Silverjet was established in January 2007 and operates three planes. The airline claims to be the world’s first carbon neutral airline.

Speaking of the investment, Silverjet’s founder and chief executive, Lawrence Hunt, said it is particularly encouraging to have secured this agreement in a challenging environment for all airlines.

The airline industry appears to be diving into its most serious downturn since the post 9/11 crisis in 2001 and 2002. In addition, British Airways said profits may decline by £250 million this year while Ryanair and easyJet have also issued warnings.

Story link: Struggling Silverjet thrown a lifeline