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Comments (1)
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Save/ShareEos and Silverjet may tank by year-end, according to airline analyst Jared Blank. These two airlines offer transatlantic flights with lower-than-usual business-class fares that tempt middle-class fliers. But the airlines are not profitable, and see no profit in sight.
[A third airline offering this service, Maxjet, tanked in the past month.]
Silverjet, which we've written about before, has a terrible business model, according to the British bank Daniel Stewart. The bank says their costs are twice as high as their revenues, and that the airline has no sound plan to its fares or reduce its costs. "We would sell at any price," the bank says.
Eos, which we've also written about before, has a terrible business model, too. Jared Blank cites the company's financial statements that the airline has a monthly gap between $7 million in revenue and about $12 million in costs. Unless angels descend from the skies and invest in these companies, they may be gone by the end of the year, says Blank.
EARLIER Southwest and Skybus cut—and add—routes.
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I for one hope Eos and Silverjet survive. I think they have enough fans that they will. A lot of passengers I've met don't want to go back to conventional airlines because service and prices are so much better on the all business airlines. It's early days especially for Silverjet who have only been going a year. I'm expecting things will really take off for them when they add new routes later in the year and get momentum going. No airline has ever made money in its first year so far as I know.
Posted By Richard on January 20, 2008, 7:22 AM