Silverjet, the start-up business class airline, was today fighting for survival after admitting it is in crisis talks to secure funding after it was unable to draw down a bail-out loan arranged just three weeks ago.

The company suspended its shares this morning after revealing that its working capital reserves were limited and that it needed to draw down from the loan facility it arranged at the beginning of the month as a matter of urgency.

Silverjet looked set to become the latest casualty of soaring oil prices, which hit a record $135 yesterday. Daniel Stewart & Company estimate that fuel costs for a round trip to New York on a Silverjet B767 has swelled from £28,600 to £44,000.

The broker said: "Against this background, we do not think anyone will bid and that, for Silverjet to survive, current shareholders will need to inject large amounts of fresh equity."

Three Silverjet flights will take off from Luton today but a spokeswoman for the airline said that the next day or two was critical.

At the beginning of May, Silverjet said that it had arranged an $8.4 million loan facility from Viceroy Holdings, a Middle Eastern investor. However, the airline has been unable to draw down $5 million that it needed urgently.

A spokeswoman said: "Viceroy has been unable to access their funds. They still want to invest."

Crisis talks are being held between the airline and the Abu Dhabi investment fund. At the same time, Silverjet has had approaches from another party, which is interested in investing in the airline.

Viceroy's funding lifeline was supposed to have secured $25 million (£12.6 million) for the airline, which would have enabled the operator to keep flying for at least the remainder of this year. The money investment also included the promise of up to $75 million in addition to develop the airline's operations, particularly in the Middle East and Asia.

Silverjet's share price has collapsed by 90 per cent since it floated 18 months ago; last year it was losing about £1 million a month.

The airline's latest problems emerged as consolidation in the fuel-hit airline industry gathered pace.

British Airways' chief executive met his counterpart at Continental Airlines for discussions over a possible strategic alliance, as the soaring price of oil increases the likelihood of consolidation in the airline industry.

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