Eos Goes Bust

Just four months after rival Maxjet collapsed, a second American business-class airline to go bust. 

Eos filed for Chapter 11 bankruptcy, which gives companies protection from creditors, and can be used to keep a firm operating. But chief executive Jack Williams said it would “cease operations entirely”.

The collapse came a week after Eos announced it was about to seal a deal to secure another £25m from one of its current investors, which included private equity firms from the US and Dubai.

The deal was due to close on May 1, but Williams said “some issues arose that could not be overcome”.

“That leaves us with insufficient cash to continue operations,” he said. Eos told customers it could not pay refunds and advised them to contact their credit card company or travel agent, and contact other airlines to make alternative travel plans.

Eos was founded by former BA executive David Spurlock and was the first all-business carrier to launch, in October 2005.

Insolvency insurance provider International Passenger Protection warned last week that many airlines could not survive without making drastic price rises.

2 May 2008