Silverjet, the all business airline based at London Luton, filled just 54 per cent of its seats in January, raising yet further doubts over the sustainability of the single-class premium business model.
The airline carried 8,729 passengers last month, meaning the load factor - or proportion of seats filled - fell from a 12-month average of 58 per cent. Silverjet needs to fill about 64 percent of seats to break even.
The news comes less than two months after MaxJet, Silverjet’s rival in transatlantic premium travel, filed for bankruptcy protection in December. It blamed rising fuel and operating costs, competitive pressure and a decline in consumer spending for its failure and raised questions over such a business model in the post-credit-crunch market.
Silverjet was given a £22 million lifeline after taking heavier than expected losses in its first year. It was the second time that it had been forced to refinance since its float in May 2007.
On Tuesday, the company said that growth achieved during the month had been less than hoped, with forward bookings unlikely to make up the shortfall in the year to 31 March 2008.
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“We no longer expect the group, in terms of operating cashflow, to be broadly cash neutral between the placing and 31 March 2008,” said chief executive Lawrence Hunt.
However he added that it will likely still hit its target of making its first month of pretax profit in March, the last month of its fiscal year.
He said: “Whilst we expect the group, in terms of operating cashflow, to absorb cash between the placing and March 31, 2008, the board continues to be confident that Silverjet will achieve its first month of pretax profit and be cash generative in March 2008.”
Broker Daniel Stewart repeated its sell recommendation and zero pence target price.
British Airways, Europe’s third-biggest carrier, said last week it would start business-class services from London City airport to New York. Mr Hunt said the new service was a “ringing endorsement” for the company’s business model.
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Shares in Silverjet, which flies three Boeing Co. 767s between London, New York and Dubai, have fallen 82 percent in 12 months.