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American niche carrier MAXjet Airways Inc, faced with high fuel costs and competition, has ceased operations and is expected to liquidate all or part of its business.
The company, which operated business class flights from London to New York, Los Angeles and Las Vegas, said on Monday its board had authorised it to file for Chapter 11 bankruptcy protection in the United States, as tough market conditions had precluded any further fund-raising.
MAXjet said the filing for bankruptcy protection will enable it to "conduct an orderly liquidation of assets".
"The board has no choice but to inform that the company cannot continue to operate," it said.
The company said its shareholders were unlikely to realise any value and that its shares would remain suspended.
"Our management team and directors vigorously explored alternative courses but, sadly, determined that a bankruptcy filing would best protect our customers and creditors," chief executive William Stockbridge said.
MAXjet suspended trading of its stock on December 7 as a result of an "inability to clarify its financial position", it said.
At the time it was in advanced talks to get financing and expected to close the deal before year-end, MAXjet said. But the board had determined that the proposed financing was unlikely to succeed in a timely manner, it said.
The company said it had contracted and prepaid Eos Airlines for about 500 seats to accommodate passengers awaiting a return flight between New York and London.
It said it had also prepaid for 450 hotel rooms in London, New York, Las Vegas and Los Angeles through early January 2008 for those whose travel plans had been disrupted.
- REUTERS
