24th Dec 2007 11:49
MAXjet Airways Inc.24 December 2007 24 December 2007 MAXjet Airways, Inc ("MAXjet" or "the Company") Chapter 11 Filing The Board of Directors of MAXjet, the United States domiciled all-Business Classairline, regrets having to inform its shareholders, employees, customers andsuppliers that the Company has been affected simultaneously by a number ofmaterial factors which have negatively impacted its financial position. Theseprincipal factors are fuel price inflation, other operating cost increases,competitive pressure and decline in consumer spending. In addition a substantialdeterioration in financial market confidence has precluded any furtherfundraising. As a result of these factors, the Board has no choice but toinform that the Company cannot continue to operate. In a meeting on 23 December2007, the Company's Board of Directors authorized a voluntary petition underChapter 11 of the U.S. Bankruptcy Code. The Board determined that this action is in the best interest of the Company,its employees, customers and suppliers. Filing for Chapter 11 protection willenable the Company to conduct an orderly liquidation of assets and resolution ofclaims. In Chapter 11 the Company will be subject to the oversight andsupervision of the bankruptcy court and will be governed by its existing Boardof Directors. The Company's current management is expected to remain in placeto oversee the sale and/or liquidation of all or part of the business and tocoordinate the analysis and resolution of claims. Regrettably, the Board doesnot currently believe that there is likely to be any value realised forshareholders. Given this, the trading of the Company's shares on AIM will remainsuspended. MAXjet flight operations have ceased including the suspension of all scheduledand charter flights to and from London Stansted Airport. "I sincerely apologize to our shareholders, employees, customers and suppliers,"said William Stockbridge, CEO of MAXjet. "Our efforts to raise additionalcapital have been unsuccessful. Our management team and Directors vigorouslyexplored alternative courses but sadly determined that a bankruptcy filing wouldbest protect our customers and creditors. I recognize that discontinuing serviceduring the holiday season may create significant disruption for some passengersand on behalf of the Company, I deeply regret any inconvenience caused." MAXjet suspended trading of its stock on 7 December 2007 as a result of aninability to clarify its financial position. At that time the Company was inadvanced discussions on a financing round for working capital and growth in 2008that it expected to close before year-end. However, the Company's Board ofDirectors has now determined the proposed financing is unlikely to succeed in atimely manner, and after careful consideration determined to file the voluntarypetition. To look after its customers, the Company has: - Contracted and pre-paid Eos Airlines for approximately 500 seats on Eos' scheduled all-Premium service to accommodate passengers awaiting a return flight between New York and London. Passengers travelling between London, Los Angeles and Las Vegas will be contacted regarding their flight re-accommodations; - Contracted and pre-paid for 450 hotel rooms in London, New York, Las Vegas and Los Angeles through early January 2008 for those whose travel plans have been disrupted; and - Prepared a motion with US Bankruptcy Court to seek authorization for additional funds that will provide additional hotel and airfare accommodation to passengers. The Company will work to schedule a prompt emergency hearing of this motion before the U.S. Bankruptcy Court. Passengers are strongly encouraged to contact MAXjet directly. Email addressesand telephone contact numbers are provided at the end of this release. Financial Background The current liquidity issues have arisen since the Company's admission to AIM inJune 2007 as a result of the combination of a number of factors that havenegatively impacted revenues and unexpectedly increased the costs of operations. Rising fuel costs have had a significant impact on sector economics. Fuel costsin the first quarter of 2007 averaged $1.91 per gallon. Fuel costs have sincerisen to $2.85 per gallon as of 19 December 2007. The average fuel price forthe 2007 financial year is expected to be $2.27 per gallon. The late delivery of the airline's fourth and fifth aircraft (including the costof rebooking impacted passengers in premium cabins on other airlines or onshort-term charters) negatively impacted 2007 cash flows. Other unforeseencosts, including increased crew salaries and travel costs, airport services andcatering, and unscheduled maintenance further contributed to the Company'sdeteriorating financial position. Competitive pressures have also increased. This has been driven both by newentrants in the all-Business Class carrier sub-sector and by incumbentmulti-cabin airlines. Both have increased capacity and have been competingstrongly on price for traffic to fill capacity, particularly in New York. Inaddition, general economic conditions have changed. The Directors believe thatexchange rate trends, declining consumer confidence and general businessuncertainty have resulted in a decline in the quality of advance bookings.Specifically, the Company's revenues were significantly and negatively impactedby the cancellation of the Washington route in October as a result ofunsustainably low load factors and passenger yields. During November andDecember, the Los Angeles route also performed below expectations, despite apositive start in late August, September and October. Of the factors listed above, no single factor can be identified as having causedthe majority of the difficulties. The Company's bankruptcy filing is required asa result of all of these factors. From early November 2007 the Company has been seeking to secure additionalworking and growth capital for 2008. The Company's Chairman was willing toparticipate in the financing round. With unfavourable market conditions,coupled with rising fuel costs, increased competition, consumer confidence andother macroeconomic factors, the financing round was unsuccessful. The Directorstherefore have authorized bankruptcy protection to preserve and maximize thevalue of the business for the benefit of the Company's creditors. INSTRUCTIONS FOR BOOKED PASSENGERS Passengers in the midst of a journey are directed to contact MAXjet customercare at: 1-866-837-9880 in the United States44 (0)12 7921 6478 in the United KingdomEmail: [email protected] Customers should provide contact information and either a confirmation number orflight date/number in their email. MAXjet is contacting customers with their newtravel itineraries in priority order based on date of departure. As analternative to the hotel rooms and seats on other airlines described above,customers may seek refunds of any unused segments of tickets from the point ofpurchase (i.e. credit card or travel agency). In addition, MAXjet staff will be available at each airport to assist affectedpassengers. Passengers who have not yet begun travel are directed to contact MAXjet customercare at: 1-888-435-9629 in the United States44 (0)12 7921 6428 in the United KingdomEmail: [email protected] Customers should provide contact information and either a confirmation number orflight date/number in their email. Customers should seek refunds of unusedsegments of tickets from the point of purchase (i.e. credit card or travelagency). SUMMARY OF CONTACT INFORMATION Passenger Contact Information Passengers in the midst of travel US: 866-837-9880; UK: +44 (0)12 7921 6478 MAXjet is contacting customers with their new travel itineraries in priority order based on date of departure. [email protected] Passengers who have not yet US: 888-435-9629; UK: +44 (0)12 7921 6428begun travel Please contact your point of purchase (credit card or travel agency) for a refund. [email protected] Media Contact Information Consumer Media MAXjet Airways Inc. Media Relations [email protected] +1 703-574-6474 Financial Media Financial Dynamics MAXjet Media Relations +44 (0)20 7831 3113 Vendor Contact Information Suppliers and Business Partners MAXjet Airways Inc. Vendor Relations [email protected] +1 703-574-6466 Shareholder Information Shareholders MAXjet Airways Inc. Legal Department [email protected] +1 703-574-6473 Please refer to the MAXjet Investor Relations site for the latest filingsregarding the Chapter 11 process once filed. This announcement includes statements that are, or may be deemed to be,"forward-looking statements". These forward-looking statements can be identifiedby the use of forward-looking terminology, including the terms "believes","estimates", "plans", "projects", "anticipates", "expects", "intends", "may","will", or "should" or, in each case, their negative or other variations orcomparable terminology. These forward-looking statements include matters thatare not historical facts and include statements regarding MAXjet's intentions,beliefs or targets. By their nature, forward-looking statements involve risk and uncertainty becausethey relate to future events and circumstances. A number of factors could causeactual results and developments to differ materially from those expressed orimplied by the forward-looking statements. Forward-looking statements may andoften do differ materially from actual results. Any forward-looking statementsin this announcement reflect MAXjet's view with respect to future events as atthe date of this announcement and are subject to risks relating to future eventsand other risks, uncertainties and assumptions relating to MAXjet's operations,results of operations and growth strategy. Save as required by law or anyapplicable rule or regulation, MAXjet undertakes no obligation publicly torelease the results of any revisions to any forward-looking statements in thisannouncement that may occur due to any change in its expectations or to reflectevents or circumstances after the date of this announcement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Max Buffer June