Simon Calder: The man whose business is travel

Bright and lucrative: that's the future for transatlantic business-class-only flights, despite the collapse of two such airlines in four months. Just ask Silverjet and British Airways. BA is finessing its plans for a twice-daily link between London City airport and New York. Meanwhile, Silverjet is the last man standing after a bloody business-class-only war of attrition that began two-and-a-half years ago. The surviving airline is – according to its founder, Lawrence Hunt, "almost profitable".

In November 2005, the American carriers Eos and MAXjet launched competing services between Stansted and New York. Both aimed to deliver a kind of "son of Concorde" – an exclusive, business-class-only service. And both kitted out their Boeings to carry only a fraction of the usual capacity. The Eos 757s held just 48 passengers, while MAXjet's 767s carried 102. Well, that was the capacity. Unfortunately, the proportion of seats actually filled was far lower than expected. And average fares were way below break-even levels. Last August, MAXjet was selling seats through online agents for £500 return, undercutting even basic economy on the bigger airlines for the summer peak.

MAXjet and Eos squandered hundreds of millions of pounds of their investors' cash before they metaphorically crashed and burned.

Last Christmas Eve, when MAXjet applied for Chapter 11 bankruptcy protection, and stopped all flights, Eos put out a statement that it was "flight-level profitable", but that apparently turns out to be airline-speak for "we're still losing shedloads of cash", and last Sunday filed for bankruptcy, too.

Record oil prices are pushing costs way above predictions. The economic downturn is reducing demand: executive travel is often the first casualty of corporate belt-tightening. Throw in more competition (two new players launched on the Heathrow-New York route last month alone) and a credit crunch cutting funding; result, a perfect storm.

British Airways is confident it can ride out the storm. It is connecting New York with London City (using BA planes) and with Paris Charles de Gaulle with its new subsidiary, OpenSkies. The name indicates the business plan: taking advantage of the EU-wide freedom to fly between any two airports in Europe and the US. A Boeing 757 has been fitted with 24 "Biz" seats, that convert into 6ft flat beds, plus 28 premium-economy seats. It also has a small 30-passenger economy cabin, but OpenSkies is aimed squarely at the business market. The average BA jumbo devotes one-third of its seats to business and premium economy, while OpenSkies has two-thirds.

BA's new baby has serious teething problems. The airline's pilots despise the idea of OpenSkies hiring flight crew on different terms from those enjoyed by BA's existing pilots; they voted for strike action, and later this month the High Court will decide whether or not they may legally go ahead.

Equally pressing: the launch flight is due to take off next month, but the airline has yet to start selling tickets. This suggests a certain lack of enthusiasm. One theory has it that BA will use the Eos collapse as a reason to ditch OpenSkies, while eliminating the risk of a damaging pilots' strike. The airline flatly denies this.

What of Silverjet? Lawrence Hunt's airline began 15 months ago and has yet to break even. I asked its chief executive a question that I though was quite reasonable: how demoralising is it to start each day knowing that you are going to lose tens of thousands of pounds?

"That's a ridiculous question," riposted Mr Hunt. "Any business takes time to become profitable. You have to take a long-term view."

So let's do that. Competition is set to get still tougher. Next, tax. Passengers currently pay a flat £80 Air Passenger Duty tax break compared with business class on BA or Virgin. But by November next year, APD is replaced by Aviation Duty, based on aircraft size and distance flown. The tax bill for a typical Silverjet London-New York flight could double to £10,000. Yet Mr Hunt remains optimistic.

"Even if we had to add £100 to the ticket price, to fill Gordon Brown's black hole, we're still massively cheaper than our rivals. He hopes Silverjet's dwindling coffers are to be replenished to the tune of $100m by a Middle Eastern investor.

Meanwhile, among the Eos staff looking for jobs is the chief lifestyle officer, Adam Komack, who had insisted "Eos is not simply an airline, it's a lifestyle choice". Not like bankruptcy, then.

The Independent travel offers: Discover a world of inspiring destinations

Have you tried new the Independent Digital Edition apps?
peopleGerman paper published pictures of 18-month-old daughter
Arts and Entertainment
'A voice untroubled by time': Kate Bush
musicKate Bush set to re-enter album charts after first conerts in 35 years
Life and Style
Arts and Entertainment
Robin Williams' life story will be told in a biography written by a New York Times reporter
arts + ents
Life and Style
food + drink
Life and Style
ebookHow to enjoy the perfect short break in 20 great cities
Roger Federer is greeted by Michael Jordan following his victory over Marinko Matosevic
tennisRoger Federer gets Michael Jordan's applause following tweener shot in win over Marinko Matosevic
peopleJustin Bieber accuses paparazzi of acting 'recklessly' after car crash
Arts and Entertainment
Oppressive atmosphere: the cast of 'Tyrant'
tvIntroducing Tyrant, one of the most hotly anticipated dramas of the year
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Business Development Manager / Sales Pro

    £30 - 35k + Uncapped Comission (£70k Y1 OTE): Guru Careers: A Business Develop...

    Graduate Sales Executive / Junior Sales Exec

    £18k + Uncapped Commission (£60k Y1 OTE): Guru Careers: A Graduate Sales Exe...

    Web Developer / Software Developer

    £25 - 60k (DOE): Guru Careers: A Web Developer / Software Developer is needed ...

    Oracle 11g SQL 2008 DBA (Unix, Oracle RAC, Mirroring, Replicati

    £6000 - £50000 per annum + Bonus+Benefits+Package: Harrington Starr: Oracle 11...

    Day In a Page

    Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

    Kate Bush shows a voice untroubled by time

    A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
    Robot sheepdog technology could be used to save people from burning buildings

    The science of herding is cracked

    Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
    Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

    This tyrant doesn’t rule

    It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
    Rachael Lander interview: From strung out to playing strings

    From strung out to playing strings

    Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
    The science of saturated fat: A big fat surprise about nutrition?

    A big fat surprise about nutrition?

    The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
    Emmys 2014 review: Can they genuinely compete with the Oscars

    Can they genuinely compete with the Oscars?

    The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
    On the road to nowhere: A Routemaster trip to remember

    On the road to nowhere

    A Routemaster trip to remember
    Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

    Hotel India

    Mumbai's Taj Mahal Palace leaves its darker days behind
    10 best pencil cases

    Back to school: 10 best pencil cases

    Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
    Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

    Arsenal know battle with Besiktas is a season-defining fixture

    Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
    Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

    Pete Jenson: A Different League

    Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
    This guitar riff has been voted greatest of all time

    The Greatest Guitar Riff of all time

    Whole Lotta Votes from Radio 2 listeners
    Britain’s superstar ballerina

    Britain’s superstar ballerina

    Alicia Markova danced... every night of the week and twice on Saturdays
    Berlin's Furrie invasion

    Berlin's Furrie invasion

    2000 fans attended Eurofeurence
    ‘It was a tidal wave of terror’

    ‘It was a tidal wave of terror’

    Driven to the edge by postpartum psychosis