Struggling airline Maxjet files for bankruptcy

Low-fare business class airline Maxjet said today it was filing for bankruptcy protection in the US just six months after it floated on the London stock market.

The operator – which flies to the US from Stansted airport – blamed rising fuel costs and increased competition for the “drastic” move.

It said attempts since November to secure extra funding had failed, and that all flights to and from Stansted had been suspended as a result.

The company said shareholders were unlikely to receive any value from the Chapter 11 bankruptcy, a move which keeps the creditors at bay while the owners work out how to proceed.

President and chief executive William Stockbridge said on the firm’s website: “With today’s fuel prices and the resulting impact on the credit climate for airlines, we are forced to take this drastic measure.

“Our top priority is to assist our customers, particularly those who already have begun their travel with us, in securing alternative flight accommodations.”

Maxjet today urged people booked on its flights to contact the airline.

It said arrangements had been made with another operator to take 500 passengers between New York and Stansted.

Those travelling between Las Vegas or Los Angeles and the Essex airport will be contacted about alternative travel.

The airline’s shares were suspended at 73.5p on December 7 while the business “clarified its financial position”.

Last-ditch talks reportedly took place this weekend to try and put together a rescue package.

A Maxjet statement added: “With unfavourable market conditions, coupled with rising fuel costs, increased competition, consumer confidence and other macroeconomic factors, the financing round was unsuccessful.

“The directors therefore have authorised bankruptcy protection to preserve and maximise the value of the business for the benefit of the company’s creditors.”

Around 450 customers whose travel plans were disrupted would be put up in hotels, the operator added.

Maxjet introduced its all-business-class service with a fleet of Boeing 767s between New York and Stansted in November 2005, with tickets priced from £599 (€822).

It also went on to launch routes to and from Las Vegas and Los Angeles. Around 130,000 passengers have flown with the airline since it went into business.

Maxjet was floated in May this year at a price of 138p a share, and posted a £24m (€33m) loss for the first six months this year. No one at the airline was available for further comment.