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14 April 2024

Silverjet stocks decline as Eos announces Dubai-London flights

By Shweta Jain



News that Eos, the UK-based all business-class airline will begin flights from London to Dubai in July, challenging Silverjet’s monopoly in the market, caused a sharp decline in Silverjet’s share prices on Tuesday.


The first business-class airline to start flying between Dubai and London in November, Silverjet’s shares fell as much as 23 per cent yesterday in London trading. The stock reportedly dropp­ed as much as five pence to a record low of 17 pence and was trading at 18 pence, reducing the company’s market value to £11.6 million (Dh823m). The shares have declined 77 per cent in the past six months.


Eos, which began a London-New York service in October 2005, said yesterday in a statement it will fly from London Stansted airport to Dubai International Airport from July 6. The airline is also scheduled to begin the London Stansted-Newark service on May 5.


The load factor, or proportion of seats filled, at Luton, England-based Silverjet fell to 54 per cent last month, even before the additional competition, according to a Bloomberg report.

“There’s continued concern Eos is expanding its fleet and will be competing on both the New York and Dubai routes. Silverjet must work on raising its load factor,” Douglas McNeill, an analyst at Blue Oar Securities in London told Bloomberg.


It added Silverjet reiterated last week it would post a first month of pre-tax profit in March and the airline’s Chief Executive Lawrence Hunt on Monday predicted  the February load factor will exceed 60 per cent.

Flying a fleet of Boeing 757s fitted with 48 luxury flatbeds, Eos will directly compete with Silverjet on the Dubai and Newark routes. “Our community includes many guests and investors from the Gulf, who feel Dubai and Eos are a perfect fit,” said Eos’ Chief Executive Jack Williams.

Silverjet, meanwhile, operates a fleet of three 100-seat Boeing 767s. It is expected to add two aircraft in March this year, the carrier said recently. With two UK airlines fighting for a share of the same pie, competition seems to be heating up on the business-class sector travel between Dubai and London.

“The announcement Eos is to start flying to Dubai is testament to the level of demand for premium air travel beyond what is currently offered by the legacy carriers operating on this route. Dubai has become an acclaimed destination for both business and leisure travellers alike, with air-traffic to the emirate growing at around 20 per cent year on year,” said Hunt.

However, John Morgan, Eos’ senior vice-president for Europe, said: “I don’t think Silverjet offers the same services we do, so we will not be using Silverjet as our benchmark for the Dubai route. We will be in competition with Emirates, Virgin At­lantic and British Airways.”

While Eos is still talking to the authorities about operating from Dubai airport’s executive terminal, Silverjet already operates from it.

“Dedicated security enables Silverjet’s customers to arrive just 30 minutes prior to departure. We wait with interest to see if Eos is able to offer this level of customer service and at Silverjet’s ticket price of Dh7,450 return,” said Silverjet’s Hunt.