Eos Airlines, the premium all business class airline that flies between New York and Stansted, said late last night that it had filed for Chapter 11 bankruptcy and would cease operations by Monday. The news comes after the airline agreed to raise $50m to take it to profitability just over a week ago. It would appear that this funding has fallen through.
The airline, which was founded in 2005, is planning to operate its final flights between Stansted and New York's JFK today. A spokesman said it intended to 'eliminate most of its work force'.
The airline's chief executive officer, Jack Williams, said in a statement that the 'challenging economic and credit environment' forced the company to file a voluntary petition for Chapter 11 bankruptcy.
In the statement Mr Williams said: 'After overcoming today's extremely challenging economic and credit environment to negotiate terms for a round of financing, it is regrettable that we were forced to take this action. We had been clear since closing on our last round of financing that we would need additional capital. As difficult as it is to raise funds in the current environment, investors believe in our business model and we were on the verge of success.'
'Unfortunately, just as we were working toward closing on an investment that would have carried us to corporate profitability in 2009, some issues arose that we could not overcome. It is regrettable that, even though investors continue to be enthusiastic about our business model, and even though we had a term sheet in hand, we were unable to close on the financing we needed. That leaves us with insufficient cash on hand to continue operations.'
' There are times in business when even though you execute your business plan and even though your employees do their jobs beautifully, external forces prevent you from controlling your own destiny. I want to express my appreciation to our dedicated employees and to the many Guests who have become like family to us.'
Eos was one of a handful of airlines that popped up in recent years to offer all-business class service between the US and Europe. One of its competitors, MAXjet Airlines, who also operated from Stansted, parked its airplanes and filed for bankruptcy last Christmas Eve.
Eos becomes the fourth US carrier to shut down in less than one month. The filing leaves Silverjet still flying all-premium flights between New York and London (Luton), and L'Avion flying the New York-Paris route. However, Silverjet is rumoured to be in financial trouble, with speculation that it is seeking a buyer.
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