Silverjet’s second coming dashed

Silverjet’s hopes of a second coming were dealt a crushing blow after its second rescue deal collapsed and its entire 420-strong workforce was laid off on Friday.Kingplace, an investment company backed by Swiss trust company Heritage Cie, had agreed terms last Wednesday to acquire the business-class airline. However, Mark Fry of administrators Begbies Traynor, said a battle with the Civil Aviation Authority over the financial strength and a dispute over airplane hire meant Kingplace could no longer buy Silverjet as a going concern and had forced him to lay off all staff.

The business-class only airline employed 370 pilots and cabin crew and 50 administrative staff at its Luton airport base.

Mark Fry said: “A rescue package seems unlikely. Liquidation will ultimately follow if we don’t find a purchaser. There are still people expressing an interest but how realistic that is remains to be seen.”

If the negotiations to buy the airline had succeeded, Kingfisher had promised to take on all of the existing staff, to honour Silverjet’s existing customers’ tickets and see Silverjet return to the skies in a matter of weeks.

However the failed deal is the second in four weeks. Viceroy Holdings, a United Arab Emirates backed financier, had agreed to inject a mixture of debt and equity into the business. Silverjet was forced to call in administrators when it attempted to draw on Viceroy’s loan and found that there was no money available.

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Oil cost less than US$50 a barrel when Silverjet launched its maiden flight in January 2007, however with prices now over US$130 and rising, carriers across the aviation industry have been hit hard. In the luxury airline sector alone, MAXjet, Eos and Silverjet have all gone under since last December. Silverjet, which flew three planes, burned through over £70m since its launch.
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