Silverjet battles on - all-business model looks to Asia and Middle East for the future

But conditions will be challenging. IATA this week forecast that business travel demand, which is highly geared to the economic cycle and the performance of sectors such as international banking, will slow further, due to the weakness of merger & acquisition activity and debt markets, and lower business investment activity generally.

Slowing business travel demand and high oil prices has seen trans-Atlantic all-business rivals, MAXJet Airways and Eos Airlines, fail in Dec-07 and Apr-08, respectively, prompting some commentators that the model is flawed.

That has not stopped several established carriers, including Lufthansa, All Nippon Airways (ANA) and British Airways from entering the segment.

British Airways’ OpenSkies branded all-business carrier is scheduled to launch services to New York from Paris and other Continental European cities with retrofitted B757s. OpenSkies anticipates operating a second B757 later in 2008. The airline plans to increase its fleet to six B757 aircraft by the end of 2009.

OpenSkies will operate a three-class, 82-seat configuration:

    * OpenSkies “Biz” class featuring 24 seats that convert into 6-foot, fully flat beds;
    * “Prem+” class will offer 28 premium seats;
    * “Economy” will have 30 comfortable leather seats.

ANA operates all-business service to Mumbai from Japan and recently increased the frequency of the operation and added Jet Airways as a codeshare partner, which signals the service is proving successful.

Lufthansa is also expanding its all-business network, operated by PrivatAir, with the addition of Pune in India to its network.

Meanwhile, Silverjet’s new backer plans to invest up to a further USD75 million in the ongoing development of the concept and to participate in the international roll-out into new markets within the Middle East, Asia and Africa.

All-business services seem to have a future. The key is in network selection, with Asia and the Middle East appearing to offer better prospects than the highly competitive Atlantic market.