Silverjet plans a Luton to Newark service with top fares of £1,000 return when it starts service at the end of the year. But it will also offer a few seats at £100 as it looks to emulate the low-cost model of charging.

The airline is looking to raise £25 million for the launch of the low-fares operation. The company will raise funds for the venture through a listing on the Alternative Investment Market (AIM) in May and will launch its service six to nine months later.

Chief executive Lawrence Hunt, who has been working on developing the business for two years, believed the service could revolutionise the long haul business class market. Fares will be substantially less than existing fares for business class travel and below current average premium economy travel with average return fares around £1,000, he said.

This compares to current prices for a flat-bed business class service of between £2,500 and £5,000. The management team includes chairman Peter Owen, who was at British Airways for 21 years and customer
experience director Martyn Bridger, who was head of in-flight services for BA where he worked for 24 years.

John Bavister, formerly at Thomas Cook, takes on the role of finance director and Peter Evans who was head of operations at Virgin Atlantic is the operations director. Dave Simmons, sales and marketing director, has set up marketing programmes for BA, American Airlines and Ryanair.

Mr Hunt, who has been involved in six start-up businesses since 1984, said customers would be offered a full business class service. All 100 seats on the converted 767 will have inclined flat beds and there will be significantly reduced check-in times, as little as 30 minutes, he said.

The service will operate between Luton and Newark Liberty International airport. Following the float, Mr Hunt will own a 10 per cent stake in the business while a further 10 per cent will be owned by the other five members of the management team.

The first all business airline offering low-cost fares, US-based MAXjet, launched in November 2005 and flies between London and New York and London and Washington. Another business airline, Eos, began also began flying the route in the same week.

Mr Hunt said it was possible to reduce prices as they were not offering economy seats. “Bigger companies make most if not all of their profits from premium customers and lose money in economy. Business class travel is subsidising economy travel.”

By losing the economy seats prices can come down without any compromise in service, he said. Within three years, Silverjet intends to operate a fleet of ten aircraft, all with flat beds.

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