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Yet another airline has filed for bankruptcy as the economic maelstrom sweeping the financial markets takes its toll.
Hot on the heels of several major recent casualties, Eos Airlines yesterday (27 April) entered immediate bankruptcy with the loss of 450 jobs and debts that sources estimated at $34.9m.
Eos - the business class-only airline that had previously seen off competitor Maxjet - was a surprising addition to the rising toll of failed airlines as its business model was viewed as relatively robust - particularly as it went bust with a fairly small debt.
However, in a brutally frank assessment of his airline”s position, Eos CEO Jack Williams said: ”After overcoming today”s extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action.
”We had been clear since closing on our last round of financing that we would need additional capital. As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success.”
The scale of the crisis became clear when comments by Williams hinted at investment that would have taken the airline to profitability failed to materialise. The nature of that cash input was further clouded by the carrier noting that ”some issues that we could not overcome” led to a financial shortfall.
The airline has ceased operations with immediate effect and all personnel made redundant as a spokesman told ABTN from New York: ”There were 450 employees and most will be affected - these positions will be eliminated,” he said.
The last Eos flight took off from London Stansted at 18:30 to New York JFK last night, with the bankruptcy coming as something as a shock to the business-class only model. Eos had planned to start services to Dubai this summer and the news of its demise leaves Silverjet, perhaps somewhat surprisingly as the remaining premium carrier operating such a long-haul premium model.
The Luton carrier has enjoyed something of a resurgence of late in terms of load factor, although is still reputed to be the subject of various suitors” intentions.
The Eos spokesman remained tight-lipped as to what would happen to its seven Boeing 757 aircraft or whether any potential investors were being lined up, but it is clear that the business-class only sector is undergoing severe examination as the global finance environment becomes ever-more cautious.