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All-business class MAXjet files for bankruptcy protection, ceases operations

All-business class MAXjet files for bankruptcy protection, ceases operations

MAXjet Airways ceased operations on Monday _ leaving jets on tarmacs and stranding passengers on Christmas Eve _ as the all-business class airline filed for bankruptcy protection.
MAXjet took what it called a "drastic measure" because of soaring fuel prices and the deteriorating credit market. But analysts suggested competition from AMR Corp.'s American Airlines on one of MAXjet's key routes also played a big role.
"High fuel prices were a contributing factor, but American's inauguration in October of (service between New York's John F. Kennedy International Airport and London's Stansted Airport) ... was the coup de grace," said Robert Mann, an airline consultant in Port Washington, New York.
MAXjet launched in 2005 and offered "all-premium" flights between Stansted, New York, Las Vegas and Los Angeles. But it couldn't compete with deeper-pocketed American's frequent flyer program, "newer more efficient aircraft with upgraded business class seats, corporate contracts and overall 20 flights daily to three London airports," Mann said.
While business class service can be very profitable to airlines, it's also a very "thin" market, Mann said, serving, typically, "40 to 70 seats per flight, depending on the route and aircraft." Any loss of market share to a competitor can be devastating, particularly to an all business-class carrier like MAXjet that didn't have revenue from economy passengers _ or a robust route system _ to fall back on.
MAXjet's bankruptcy filing forced the carrier to reserve hotel rooms for stranded holiday passengers who had booked return flights between New York and London. MAXjet was also working with another airline to find alternative routes, officials said.
MAXjet was not immediately available to comment, but in a message posted on the Dulles, Virginia-based airline's Web site, president and chief executive William Stockbridge apologized.
"With today's fuel prices and the resulting impact on the credit climate for airlines, we are forced to take this drastic measure," Stockbridge said. "We are extremely saddened to discontinue a service that we so passionately believe in, and we thank our loyal flyers."
The airline also advised customers who had booked tickets to seek refunds from their travel agency or credit card company.
MAXjet said trading in its shares on the London Stock Exchange's Alternative Investment Market _ halted earlier this month "pending clarification of its financial position" _ would remain suspended. MAXjet shares last traded at 73.5 pence ($1.45, euro1.01).
Hotel rooms were being booked in London, New York, Las Vegas and Los Angeles through early January 2008.
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AP Business Writer Samantha Bomkamp contributed to this report.


Updated : 2021-07-24 10:52 GMT+08:00