MAXJet Files For Chapter 11

December 27, 2007

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MAXJet Airways, an all-business class airline, has filed for Chapter 11 bankruptcy protection from creditors after canceling all flights earlier this week, according to court documents.

The company said on Monday it had ceased operations and expected to liquidate all or part of its business due to pressures from high fuel costs and competition.

It filed for bankruptcy protection late Monday in US bankruptcy court in Wilmington, Delaware, according to the court documents.

MAXJet, which operated flights from London to New York, Los Angeles and Las Vegas, was on track to record a fourth-quarter loss of more than USD$20 million in earnings before interest, taxes, depreciation and amortization, the company's chief financial officer John Severson said in the court documents.

The company listed state-owned Israel Aerospace Industries as its largest creditor, saying it owes the group about USD$2.4 million.

"We are extremely saddened to discontinue a service that we so passionately believe in," the company's president and chief executive William Stockbridge said in a statement.

"Our top priority is to assist our customers, particularly those who already have begun their travel with us, in securing alternative flight accommodations."

MAXJet suspended trading of its stock on December 7 and said this week it does not believe shareholders will receive anything from the bankruptcy proceedings.

The company said previously it had contracted and prepaid Eos Airlines and 450 hotel rooms in London, New York, Las Vegas and Los Angeles to accommodate passengers.

(Reuters)