MAXjet goes bankrupt
24.12.2007 (Guardian and Telegraph)
A business class only airline that flew transatlantic routes from Stansted airport
in Essex has ceased flying a day before Christmas after filing for bankruptcy.
American-owned MAXjet, which started services two years ago, operated between
Stansted and New York, Las Vegas and Los Angeles.
Last month MAXjet shares on the London Stock Exchange’s Alternative Investment
Market were suspended.
Maxjet kisses goodbye to its cash
The premium airline’s collapse owes as much to managerial mistakes as to rising
So how did Maxjet spiral out of control and crash so spectacularly? Insiders
point the finger of blame at American lawyers, saying the company would have had
a couple of extra weeks to find a backer in Britain, where there is less risk
of class-action lawsuits.
Rivals in the cut-throat airline sector are not slow in criticising Maxjet’s
timetable, route maps and aircraft. Aviation experts pointed to the company’s
schedule of destinations, which included London to Las Vegas and Los Angeles as
well as the normal London-New York route, as a major weakness.
By expanding to the west coast destinations early in its development Maxjet had
to put on a service that did not offer daily frequency, normally considered a
necessity for business-class customers.
Intense competition from the traditional multi-class airlines and rival business-class-only
operators Silverjet and Eos meant that Maxjet did not manage to lift its fares
above the minimum threshold required to keep flying.
By operating Boeing 767/200s Maxjet was using aircraft that had neither the best
operating profile nor the best fuel efficiency, crucial elements of a successful
airline. Safety requirements for its aircraft meant that Maxjet was limited to
routes that passed within 180 minutes’ flying time of the nearest diversionary
airport, something that added to its transatlantic journey times and fuel costs.
Extraordinarily, given that it had a fleet of just six aircraft, Maxjet kept
one plane on permanent standby – something described by Douglas McNeill, an analyst
at Blue Oar, the broker, as “ruinously expensive”.