Silverjet's passenger numbers put shares into spin

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Shares in Silverjet hit an all-time low yesterday after the business-class only airline revealed lower-than-expected passenger numbers for January.

Lawrence Hunt, the chief executive, insisted that the 30 per cent drop in the shares was "not really material", and reaffirmed his projection that the business could reach break-even as soon as next month.

The 54 per cent occupancy rate for Silverjet's fleet of three 767s, which fly from London to New York and Dubai, spooked investors, who had been expecting a slightly higher rate. Mr Hunt said the company was still on track, however, and that revenue had doubled from the same time last year, when the airline was first getting off the ground.

Investor doubts about the viability of a business-class-only carrier have risen since MAXjet filed for bankruptcy just before Christmas. However, Mr Hunt added: "We are now the lowest fare business class across the Atlantic, and now that MAXjet is gone they can't play suicidal pricing games anymore – MAXjet going bust was a great Christmas present."

The pessimistic mood surrounding Silverjet was accentuated last month when Mike Stoddart, an analyst at Daniel Stewart & Co, put out a 32-page research note in which he advised investors to "sell at any price" and assigned a value of "nil" to the business. Mr Stoddart reiterated his view yesterday on the weaker-than-expected numbers. The carrier has said it needs average occupancy rates of 65 per cent to break even.

Mr Hunt said he was unaware of whether Simon and David Reuben, who granted a £10m loan to Silverjet in November that can be converted by 11 February into 18.3 million shares in the company, intended to do so.

Investors are keen to see what the brothers will do, as their decision could be interpreted as an indication of their confidence in the business. If they did convert today, the value of the holding would be less than half of the level at which they bought in.