I realise that this is moderately OT, but of some relevance given that they are a competitor to BA.

Maxjet reecently released its financials for the period to 30th June 2007. Not pretty reading:

http://www.digitallook.com/news/rns/...m_Results.html

Scheduled Passengers: 31,186
Revenue ($000s) $27,295
Operating Loss ($000s) $31,900
Load factor: 83.1% (in June)

I am no accountant, but operating loss is greater than revenue. Fares need to rise by $1000 to cover this loss. This when fuel prices (i.e. costs) are rising.

I wonder for how long this is sustainable?

It's a long time since I studied accountancy, but I think the more inteersting point is the improvement over the year...

Half Year Ended 30-Jun-07 30-Jun-06 % Change
Scheduled Passengers 31,186 20,862 49%
Revenue ($000s) $27,295 $15,711 74%
Operating Loss ($000s) ($31,900) ($29,985) -6%
Loss per share ($2.05) ($3.51) 41%

Operating loss is flat despite the fleet increasing circa. 100% but revenue is (fortunately) going up.

It's sustainable so long as the investors keep believing it's either a sound business model or perhaps ripe for acquisition...

I'll be posting a Maxjet review in the next 7-10 days having flown them on a ticket that I won at the Mod Do in Washington. If anyone has specific questions please let me know.

(PS The STN-LAS flight I took was full!)

Is it all about marketing. I have friends who do Trans-atlantic weekly and sadly (for Maxjet) they have ceased being a talking point. SilverJet is the name mentioned now.

Yep, just needs more volume to spread some of the central fixed overhead across. Must have been expected and I would assume they are broadly on plan? Otherwise they really have got the pricing proposition wrong.
As for takeover, well I am not sure the model is yet proven from a profitability viewpoint to be attractive (unless its a distress situation but even then what would you be buying as say AF or LH or BA? The brand? The STN slots? The aircraft leases? NOt really any value without profits).

I suspect the problem is not so much the resilience of the legacy guys but that rush of all business carriers that entered the market. Given the ceiling on their fare is probably something like 110% of the corporate rate J on BA/VS for corporate travellers, they just need to fly (a lot) more bums. Load factors looking fine so far.

Looking forward to the review. Just met a couple on vacation in Palm Springs who who have flown Maxjet STN-LAS three times. They were raving about the terrific value. My question -- aside from the flight -- is what would it cost me to get a cab from STN to Richmond (flight arrives STN at noon)?

Looking through their financial statements I noticed there spending on marketing decreased from 6million to 3 million, that certainly doesn't help things, but their load factors do look pretty good. So like somebody else said, it seems to me that the cost of the planes and interest and other overhead items is what is really dragging their income down. However, their cash from operating activities is a negative 30 million, it'll get better with time but that can't be sustained for long otherwise they'll have to keep on borrowing or raising equity.

Probably more than the flight!

I live in Tooting which is 3-4 miles from Richmond, and a minicab from my local firm is �50 to Stansted, so figure �55-�60 if prebooked.

I took a MaxJet flight (thanks to Randy as well), and boy did I have a terrible return leg. 10+ hour delay, tech stop in Iceland, and a 1 a.m. arrival into LAS with a 8 a.m. connecting flight rebooked. MaxJet did what it could to make things barely tolerable (day room in STN, overnight accomodations in LAS--although for only five hours albeit at the MGM). But they did go out of their way to pick up incidentals (e.g., cab from MGM to LAS, our canceled tour tickets). And, the cabin crews on both flights were great. Still, given the unreliability of their aircrafts, I'm not sold.

Excuse my ignorance, but if they are flying at an >80% load factor, they surely can't actually get many more bums on seats without seriously increasing their costs (i.e. by flying extra routes / frequencies)? To my simple mind they need either to push up the revenue per passenger by c.$1000 or to reduce costs. Both of these look a pretty tall order to me given the competition and the rising cost base.

Or am I completely off the plot (not the first time...)

I wouldn't worry too much about that to be honest. They needed to spend a lot at launch as they were effectively launching the sector for 'All Biz Class' flights, not just Maxjet as a brand. The marketing will probably also include PR, launch events etc too, hence the higher cost.

Yes they have more routes to support now which would need more support at the US end, (i.e. ex LAS, ex IAD etc) but not at the UK end.

3 million is actually a very reasonable marketing budget for an airline of their size.

I too had trouble with reliability -- albeit over a year ago. Had planned a short trip to London (3 nights) to go to Chelsea. When I gave up on departure, it was already going to be 8 hours late. I believe it was ultimately 12 hours. On the other hand, I've had a colleague who has had a couple of good experiences with it.

was at recent LAX launch event in LAX and spoke to some of MaxJet senior management including CEO.

- they need loads in the 70s% to break even.
- they have reduced advertising cause they are finding word-of-mouth works well for them
- they are surprised by high 'return-to-UK' loads - they were expecting / hoping for high loads ex STN due to marketing spent in UK but spent less in US. however, loads still pretty decent.
- they are introducing an extra plane around this time (the launch was 30th August and they said end of September) to initially be on 'stand-by' for issues with existing fleet (though i suspect they'll eventually use it to increase number of flights to certain locations as cant imagine them being able to afford 'luxury' of spare plane sitting around)

I don't see how one plane would give them enough back-up to matter --"enough" to justify the expense -- to really be "backed-up" they would need three planes -- In the US, one on the West coast, one on the East Coast; and one in London. If they really are acquiring another plane, my hunch is that you're right -- it will be primarily to up capacity, or possibly to add anothe route?

forgot to add, they also felt quite bullish about Open Skies and, as a US company, being able to offer STN - Dubai etc flights meaning they can offer NY - DBX as a route with ability of picking up 'new' customers in STN.