Even luxury it would seem is far from immune. Luxury goods from Gucci to LVMH to Lamborghini are supposed to be able to survive end even thrive in the typical economic downturn, but the fuel crisis, rising competition and problems of its own making having caught up with one of the new generation of luxury airlines that have captured a growing share of North Atlantic premium travel. MAXjet, which offered all business-class flights between London Stansted and the States, shut down and went into bankruptcy a few weeks after it suspended its shares on a London exchange. MAXjet, which competed with all first-class Eos and Silverjet on the London route, began service in late 2005 with Boeing 767s outfitted with about 100 business-class reclining seats, but repeated mechanical problems with its fleet and the resulting cancellations hardly helped. MAXjet had a net loss of $49.5 mllion in the first six months of the year, as it was hit by higher maintenance and fuel prices. It lost of $79 million (net) in 2006, its first full year of operations, on revenues of $41.1 million.
It chose Stansted because of the airport’s ease of connection to London’s Canary Wharf financial district, and used New York JFK as its US base. It had tried operating from Washington Dulles, where its executive offices were, but had limited success with that route; it had added Las Vegas and Los Angeles with slightly more success, but not enough to keep it in business. After American Airlines began JFK/Stansted service, its selling proposition - business class at an affordable fare - became shaky. The other players in the premium niche say they’re doing well and Eos, which has only 48 seats on its planes, says business is booming. Silverjet, which flies from Luton, will accommodate MAXjet flyers, if it has room. Eos is truly a premium offering, with full beds, while Silverjet also has a high class product. MAXjet by contrast was very much selling on price rather than luxury, and when American came into the Stansted market, it faced a mighty rival. This perhaps proves that in a downturn, it’s the discount champagne rather than the top of the line brands that suffers the most.