It’s been a bad few months for small independent airlines, particularly those in the all-business class segment. With oil prices well over $130 per barrel and predicted to rise further, as well as the tightening credit conditions, airlines are struggling to turn a profit.

The first all-biz airline to stop operations was actually OzJet in 2006, an Australian start-up which served the business market between Sydney and Melbourne. Unable to grab a good share of the market it shut its doors after a few months. The airline was sold and resurfaced as a charter outfit.

Maxjet was a budget all-business class airline based at London Stansted and served New York, Washington DC, Las Vegas and Los Angeles. Fares were cheap (premium economy levels) and the airline managed to survive just over 2 years. On Christmas Eve 2007 the airline shut down. The name was sold on and will now become a charter service for US college athletes.

EOS Airlines, a first class operation using 48 seat 757s to serve Stansted and NYC survived for 2 1/2 years before closing in April 2008 unable to attain additional funding. EOS prices had been dropping but with fuel costs rising and only 48 potential revenue seats on board, market conditions caught up with the carrier.

Silverjet, the British all-business class airline based at Luton which flew to Newark and Dubai went under last month after operating for less than 18 months. Flying 25 year old fuel inefficient 767s meant it was running at a loss and investors pulled the plug on finance.

This year has also seen the demise of Oasis Hong Kong Airlines, the budget operator which flew from Hong Kong to London Gatwick and Vancouver. Oasis operated both an economy class and a business class service on its 747s. Whether the budget long-haul model is sustainable only time will tell – Air Asia X and the likes of Zoom Airlines are still in business.

The only all-business class airline currently operating transatlantic is L’Avion, from Paris to Newark. It has signed a marketing agreement with British Airways who will soon operate their own 3 class ‘OpenSkies‘ service from Paris to New York.

Privatair operates various all-business class flights on behalf of Lufthansa, Swiss and KLM.

It seems only those services backed by major airlines can survive the current market conditions. We are likely to see a lot more consolidation in the general aviation industry especially if oil continues towards $200 per barrel.