New Discount Biz Class Airline Jumps Into Fray

Jan. 6, 2007 — -- The ranks of discount all-business-class airlines flying across the Atlantic will grow Jan. 25, when Silverjet begins daily service between New York and London.

The start up carrier joins MAXjet and Eos on that route, which they have been flying for about a year. Those two carriers have found demand so good for business class service with flat-bed seats at a low price that they have already expanded their service, with Eos adding more frequent flights from New York's JFK airport and MAXjet adding routes from Washington Dulles and Las Vegas.

Silverjet was founded by British businessman Lawrence Hunt and had no trouble raising $50 million from U.K. institutional investors and other equity sources. When asked if there's space for another all business class airline, Hunt answered, "Without a doubt."

About four million passengers travel between New York and London each year, and the most lucrative segment of that market is the premium traveler -- about 1,500 each way, each day. But fare prices on regular carriers flying the route range from $5,000 to $9,000 round trip. Silverjet's fare is $1,798 round trip.

"To be successful," Hunt said, "our fare had to drop by more than 50 percent below premium economy."

Hunt added that the trans-Atlantic market is ready for a shakeup.

"The business and leisure consumer flying in business class is being ripped off," he said. Those passengers, he added, "are paying 10 times what they could pay for an economy ticket."

Silverjet will fly between Newark and London's Luton Airport, which is 32 miles from the city center. Eos and MAXjet fly to another of London's secondary airports, Stansted. Silverjet will be Luton's only long-haul airline.

"If there's a problem with Luton," Hunt said, "it's one of perception. Three million business passengers fly through there each year, and we'll use the same private jet terminal they do."

Hunt has never run an airline before, but the management team has long experience, some with British Airways. And as a result, Hunt said, Silverjet's in flight service will match the major carriers and go them one better on the ground, eliminating most departure hassles.