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Another one bites the dust - EOS Airlines shutting down

Another one bites the dust - EOS Airlines shutting down

Old Apr 26th, 2008, 09:00 PM
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Another one bites the dust - EOS Airlines shutting down

April 26, 2008

To Our Valued Guests,

The relationship we have is very special. You have shown a true appreciation for the commitment and service that defines Eos Class and it has always been our pleasure to deliver Eos Class service to you. The sense of camaraderie and level of engagement we've developed together transcends the traditional airline space.

Our unique relationship makes it all the more difficult to share with you the news that Eos has filed for bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York. On April 26, 2008, we plan to operate Flight 6 (8:30pm) from JFK to STN. On April 27, 2008, we plan to operate Flights 3 (1:00pm) and 7 (6:30pm) from STN to JFK. Flight 5 from STN to JFK and all flights from JFK to STN on April 27, 2008 are canceled. We will cease operations entirely after April 27, 2008.

This announcement is particularly regrettable since we have achieved so much, including having a term sheet in hand for additional financing. Clearly, even in today's challenging economic and credit environment, investors believe in Eos. Unfortunately, some issues arose that prevented the parties from moving forward.

We sincerely apologize to those of you who have travel planned in the days ahead. Eos Guests should seek alternative arrangements for travel and should contact their credit card companies or travel agents directly for information about how to obtain a refund for unused tickets.

For our Club 48 members, unfortunately, in the face of this bankruptcy filing, you will no longer be able to redeem your points for rewards. Any value related to your membership will be determined by the court as part of the bankruptcy process.

Additional information is available at the following links:

Customer Information

* Customer FAQs

Supplier Information

* Supplier Information
* Claims Information

Media Information

* Press Release

General Information

* Claims Information and Court Documents
* US Bankruptcy Court for the Southern District of New York


Again, we apologize and thank you for everything, especially for being our Guests.

Sincerely,

Jack Williams, President & Chief Executive Officer
Dave Spurlock, Founder and Chief Commercial Officer
Tom Martin, Chief Financial Officer
Gil Morgan, Chief Operations Officer
Adam Komack, Chief Lifestyle Officer
John Turnipseed, Chief People Officer
Jim Prebil, Chief Information Officer
John Morgan, SVP, EMEA
Andy Menkes, SVP, Sales - Americas


www.eosairlines.com
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Old Apr 26th, 2008, 09:07 PM
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If I had Silverjet or L'Avion tickets booked, I would be very worried now.
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Old Apr 26th, 2008, 09:15 PM
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yes, I would be worried also. Wow.
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Old Apr 27th, 2008, 08:33 AM
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Wow, that is pretty surprising. I know all airlines have been hammered by the continuing rise in fuel prices but wasn't EOS supposedly doing well relatively?

A number of friends and associates have flown with them and had positive things to say and said the load factors looked good. The news reports aren't specific on the cause of the shutdown. Does anyone know if it was lack of passengers or lack of available credit? If it was just fuel prices wouldn't they have tried raising fares for awhile to see if that worked?
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Old Apr 27th, 2008, 08:58 AM
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more credit - it fell through

EOS was predicting profitibility sometime in 2009 so they need more credit and they didn't get it.
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Old Apr 27th, 2008, 09:09 AM
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You have to remember that AA started JFK-STN route about a year ago. The main purpose (I believe) was to squeeze EOS. AA flight loads on that route are light, yet AA can sustain it longer than EOS could.

Another advantage for AA is the fact that they offer feeder routes from rest of the country to JFK and keep the same fare. EOS was limited to passengers from NYC area so their passengers outside the area had to purchase a seperate ticket just to get there.

The big question is - will AA pull the JFK-STN route now that EOS is gone?

AA and BA are very protective of US-UK routes and they can be very predatory when somebody tries to step on their toes, especially any airline that takes away the premium class passengers which MaxJet and EOS did.

Rough business the airline business....

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Old Apr 27th, 2008, 09:21 AM
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One more thought....

Stansted, while a great idea for any passenger that is flying to London only, is not the best airport for premium class passengers that needed to connect to Europe or beyond.

Stansted is a low cost carriers hub.

How do you sell that to your premium passengers that have a need to be in France, Italy, Germany, etc?

The passengers flew in absolute style for 6-7 hours and then what? are they expected to get on RyanAir or EasyJet to get to their final destination? or take a long taxi/limo/bus ride to LHR?

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Old Apr 27th, 2008, 09:39 AM
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Eos "doing well" meant they're getting customers, getting good reviews, adding planes to fleet and adding frequency.

However, it has never made a dime and you cannot run an airline losing money forever (unless you're Alitalia). In relative good times (like 2006-7), there are enough stupid investors to keep pumping money into these business, but with the current oil prices and economic slowdown, even these stupid investors start to wake up and say "enough".
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Old Apr 28th, 2008, 06:05 AM
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How do you sell that to your premium passengers that have a need to be in France, Italy, Germany, etc?

You assume that "premium passengers" are somehow above using a low-cost carrier if it is convenient and saves them money...I'm one and that's one way I I GOT that money.

Frankly, i think EOS may have had probelms thinking it could survive by catering to one "class" of passenger but what do I know?
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Old Apr 28th, 2008, 06:43 AM
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Dukey,

we're discussing business plans not individual preferences.

A premium/business passenger usually doesn't care about the expense as long as it is within a certain allowable budget.

That's why I believe that the JFK-STN route was a mistake for EOS.

As an employee I have the following choices:

1. JFK-STN EOS (wonderful, relaxing experience)
then connect to RyanAir to Rome???

2. JFK-FCO Alitalia in business class (and please let's not get into a discussion how good/bad Alitalia is. I'm just using it as an example)

Both fall in under the $5000 budget

Which one would you chose?

My point is that EOS could not get that part of the market no matter how wonderful their product was.
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Old May 2nd, 2008, 05:43 AM
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$25 million cash injection keeps Silverjet flying.....

......Silverjet, which flies from Luton to New York and Dubai, said recent increases in fuel prices and tightening credit conditions had taken their toll on the business. Its working capital and residual reserves had been hit.


http://edition.cnn.com/2008/BUSINESS...nds/index.html

it looks like another one may be going.....

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Old May 2nd, 2008, 07:39 AM
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Well, $25m will let them last through the summer.
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Old May 2nd, 2008, 08:16 AM
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I was actually thinking of using L'Avion. So I guess I should just forget this plan?
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Old May 2nd, 2008, 08:20 AM
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I wouldn't buy any ticket on any small carrier in advance. Last minute okay.
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Old May 2nd, 2008, 08:33 AM
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Prices to Europe seem outrageous. Even for June it's well over $1000. L'Avion is charging something like $1500 per person. I don't think I can get this fare last-minute though.
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Old May 2nd, 2008, 08:40 AM
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Well, you can decide whether you want to take the risk. Let me remind you that both Skybus and Eos shut down without any warning. While Maxjet has shown issues prior to shutting down, when it happened it still caught plenty by surprise.
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Old May 5th, 2008, 08:16 AM
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Hi, if I may, let me revisit L'Avion. When these others shut down "without warning," what's without warning?

For example, now, if I buy tickets on "L'Avion" for a month ahead, is that considered a "big risk"? Obviously no one can quantify, but just trying to get a better handle of this. For the others that went under, were there negative news reports? Did people know that the airlines were in dire straits? What about L'Avion by comparison?

Thanks again!
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Old May 5th, 2008, 08:21 AM
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What is without warning?

Most people think Eos was well run, it was expanding, and there was no rumors or signs that it may shutdown (unlike Silverjet, which had lots of rumors).

Then 2 weekends ago, they shut down with about 24 hours of notice.

That's the timeframe we're talking about here.
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Old May 5th, 2008, 10:52 AM
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Thanks. That's the sort of clarification I was looking for.
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Old May 5th, 2008, 11:10 AM
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What about an airline like Eurofly?

Is this an airline that can go under all of a sudden? I did fly them three years ago and they are still around.
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