Maxjet, the business-class-only airline that floated on AIM this year, suspended its shares yesterday amid fears over its financial position.

It is understood that the company is suffering a cash shortage, squeezed between a price war that is pushing ticket prices down and the credit crisis that is constraining its ability to raise finance. The Stansted-based carrier is one of three premium airlines that launched in quick succession, which have since found themselves in difficulty. In October Maxjet suspended flights to Washington due to insufficient demand.

The airlines took off into a climate of soaring oil prices, frozen credit markets and slashed City bonuses and all are now facing heavy losses. Maxjet lost $31.9 million (£15.7 million) in the six months to the end of June, and last year, before floating, it recorded a loss of $80 million.

Last month Silverjet, Maxjet’s main rival in the transatlantic premium business-class market, was given a £22 million lifeline after taking heavier than expected losses in its first year. It was the second time that Silverjet had been forced to refinance since its float in May.

Maxjet assured passengers yesterday that it was “business as usual” and that no flights would be cancelled. But Silverjet immediately pounced on Maxjet’s predicament by offering nervous travellers a seat for the same price they paid for their Maxjet tickets, illustrating the cutthroat nature of the fledgling business-class-only sector.

Silverjet, despite being slightly more up-market, has been drawn into a price war with Maxjet. Eos, the other premium service, has positioned itself at the top end of the market.

The Federal Aviation Authority, the American regulatory body that oversees Maxjet, would instantly revoke an airline’s operating licence if there was a question mark over its solvency. But the restrictions imposed on MaxJet as an AIM-listed company are more stringent.

One analyst said: “It’s a cash issue.

The traffic data doesn’t look bad for the long-haul premium carriers they’re offering good value. The question is whether they can survive, given fuel prices.”

Figures released yesterday by Maxjet, which has refused to comment further on the share suspension, demonstrated the dramatic rise in passenger numbers, as the carrier undercut flagship airlines. Passenger numbers increased 123 per cent in the year to October. But new carriers are more exposed to rising fuel prices because they have not had time to develop the hedging positions of their more established rivals.

On suspension, the shares stood at 75p, a 25 per cent fall over the week.

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