MAXjet forced to ask for share suspension

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The Independent Online

MAXJet Airways, the business-class only airline which operates between the London and the United States, has requested a suspension of its shares pending "clarification of its financial position".

The airline, which flies regular services between Stansted airport, Washington DC, New York, Las Vegas and Los Angeles, said its board will update investors in due course, but would give no details of the nature of the clarification or when it would make its official statement to the market.

MAXjet has attracted more than 100,000 passengers since it was set up in 2005 and recently revealed it had made an operating of loss of $31.90m in the six months to the end of June, an increase on the $29.99m it lost last year, despite an increase in sales from $27.3m to $15.71m.

In September, the company also announced plans to begin a service between Seattle and Shanghai, saying it had applied to the US government for approval. A spokesman for the company said the share suspension would not affect customers and that its airplanes would continue to fly as scheduled.

However, Howard Wheeldon, a senior strategist at BGC Partners, said the news was shocking. "The whole thing came as a total shock to the market and it does make you question whether or not they have got the right model," he said.

"British Airways and some of the other big carries seem to doing fine with their transatlantic services, so you really must ask about MAXjet."

He added: "We have no details whatsoever about this review of the finances. It would be surprising if they have just run out of money, but then again, we just don't know the state of play."

Mr Wheeldon added that smaller airlines such as MAXjet always ran the risk of being the first to take a hit from tighter economic conditions as they are less able than larger rivals to reduce cost through economies of scale.

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