Business Weekly

End of the line: Chapter 11 provides a sorry ending to the MaxJet story

The collapse doesn't appear to have signalled a quick end to the 'boutique luxury' service as a model, with Maxjet's competitors quickly mopping up stray customers left by the airline's disintegration. There are even rumours that British Airways is aiming to join the fray before the end of the month.

Despite the previous market leader's final departure from Stansted, other firms offering an all-business class service from East of England's airports - Eos and Silverjet - have both issued statements reassuring customers that all is well within the market, going as far as offering a winter special on fares.

Market analysts cite a range of possible causes for the collapse, joining the company in blaming soaring fuel prices and the current credit climate, as well as its lack of flat beds, over-stretching on routes and plain bad management.

The bankruptcy has precipitated the third loss of a transatlantic carrier for Stansted Airport, with MAXjet preceeded by Continental and American, although the latter US giant has recently returned after more than a decade away. 

 Luton-based Silverjet's CEO was quoted as saying that he thought American Airline's recent re-entry to the Stansted family was the final nail in the coffin, undercutting MAXjet by some $200 on flights to and from the same airports.

"It is with deep regret that I must inform you that MAXjet filed Chapter 11 bankruptcy on 24 December 2007," president and CEO, Bill Stockbridge said in a statement.

"With today’s fuel prices and the resulting impact on the credit climate for airlines, we are forced to take this drastic measure. Our top priority is to assist our customers, particularly those who already have begun their travel with us, in securing alternative flight accommodations."

A U.S. Bankruptcy Court ruled last week that MAXjet would be allowed to use $390k to help accommodate stranded passengers. The court also granted interim approval to MAXjet's request to pay other airlines to carry its passengers and to book hotel rooms for affected travelers, as well as authorizing credit card companies to provide refunds to customers who had already reserved tickets.

According to a MAXjet statement, the airline has contracted with Eos Airlines for seats on Eos' scheduled all-Premium service to accommodate passengers awaiting a return flight between New York and London.

Passengers needing return travel between London, Los Angeles and Las Vegas will be contacted regarding their flight re-accommodations, and the company has also secured hotel rooms in London, New York, Las Vegas and Los Angeles through early January 2008 provide to affected passengers whose travel plans have been disrupted.

"We are extremely saddened to discontinue a service that we so passionately believe in, and we thank our loyal flyers who helped build MAXjet since our start in 2005," continued Stockbridge.

The US-based, AIM-listed company was the first into the all-business class market, offering affordable luxury on transatlantic flights to four US cities, including the West Coast, a possible cause of its downfall according to analysts.

MAXjet CFO John R. Serverson said in court filings that liquidation of airline assets will probably be insufficient for shareholders to recover any of their investments. Assets of $66m and debts of $49m were listed in the firm's bankruptcy petition.

TrackBack URI for this entry

Comments (0)

Subscribe to this comment's feed