Silverjet to use cash from share placing for fleet, route expansion

Chief executive Lawrence Hunt said the placing of 14.4 mln shares at 180 pence each would help it fund plans to boost its fleet to 10 jets in the next three years and to expand the number of routes it operates from one to four.

The group has three Boeing 767-200 aircraft and is expecting the delivery of another in three weeks' time followed by a fifth in September. It also has two more on option for potential delivery by March 2008.

Hunt said the group is in talks with aircraft suppliers about acquiring further aircraft, although he declined to name them or to give other details.

"We're in a number of interesting negotiations with suppliers and having a strong balance sheet clearly helps that," Hunt told AFX News in a telephone interview this morning.

Silverjet launched a daily, scheduled, exclusively business-class service in January between its private terminal facilities at Luton airport in Bedfordshire and Newark in New York.

Hunt said the group plans to run three daily services on the route by the end of the year and is applying for licences to expand the number of routes it operates to four. It expects to more than double its workforce by the end of 2007 to in excess of 300 people, compared to the current total of about 140.

Silverjet is considering serving more destinations from Luton and possibly other locations in Europe and will make an announcement later this year, he said.

Hunt recently appeared before the Commons' transport select committee to support proposals to liberalise the transatlantic air market between Europe and the US.

European transport ministers approved the plans just under two weeks ago, allowing any EU-based airlines to fly from any city within the EU to any city in the US and vice-versa.

Hunt said Silverjet did not intend to launch US services from Heathrow, but wants to be able to fly from other European cities to New York.

He said it was a "nonsense" that airlines are currently prevented from flying between airports of their choice.

Hunt accused the British government of lacking a clear policy to liberalise the skies, instead leaving it to the US to lead the way.

Chancellor Gordon Brown had done nothing to try to progress the issue despite his pronouncements about wanting to reduce trade barriers, he said.

"There's no back-up to their statements about liberalising trade and travel between countries," he said.

Silverjet said in a trading update this morning that it expects its core operations in the year to March 2007 to perform above market expectations and that forward bookings are substantially ahead of the firm's initial hopes.

It said its March load factor - how full its aircraft were during the month - was 59 pct, which it described as significantly ahead of its expectations.

The group said it sold 3,293 revenue-generating seats during the month and 81 pct of its flights arrived and departed within 15 minutes of schedule.

In addition to financing Silverjet's growth plans, the 24.6 mln stg net of expenses raised through the share placing would help to satisfy regulatory requirements on airlines to maintain a certain amount of cash on their balance sheets, it said.

Date posted: 04-Mar-07