Silverjet, the last business class-only airline flying from Britain, has secured a $25 million (£12.6 million) lifeline from a Middle Eastern investor to keep it operating for at least the remainder of this year.

The money is thought to have come from an Abu Dhabi investment fund and includes the promise of up to $75 million more to develop the airline's operations in the future, particularly in the Middle East and Asia.

Silverjet's new partner is providing the initial investment as a debt and equity package and will receive a 28 per cent stake in the airline. Silverjet's share price has collapsed by 90 per cent since it floated 18 months ago and last year it was losing about £1 million a month.

The carrier offers 100 business-class seats on its flights, which depart from a private terminal at Luton airport to New York and Dubai. Its fares are typically £1,200 return to New York, about half of what other airlines charge. Eos, which offered a similar business-only service from Stansted airport, went into bankruptcy protection last weekend. MaxJet, which also flew from Stansted, went into bankruptcy protection last Christmas and is now operating as a charter service.

Despite lower fares these carriers have struggled to compete with the major airlines such as British Airways and Virgin Atlantic, which offer greater frequency of services, air miles and departures from principal airports. However, before the credit crunch affected business travel the concept of a business-only airline looked attractive as these passengers represent the profit margin for most carriers. BA is thought to reap about 70 per cent of its profits from premium passengers on the North Atlantic route. BA and Virgin both considered starting their own all-business services but then scrapped the idea when fuel prices continued to rise and the United States economy slowed.

Silverjet's survival will owe much to the praise that passengers have heaped on the airline for its service. However, like other airlines it will still struggle to become profitable this year with oil prices at $120 a barrel.

Under the terms of the rescue deal announced yesterday, Silverjet will issue new equity worth £4.1 million at 17p a share. The airline is now planning new routes to India, South Africa and the US West Coast. Shares were up 2.5 per cent to close at 17p.

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