April 30, 2008 – THE handheld IFE community continues to enjoy a white-knuckle ride aboard the surviving premium-only carriers, with Britain’s Silverjet announcing a memorandum of understanding for a further cash injection and L’Avion of France reporting an encouraging 78 per cent load factor for March while saying “non” to enquiries about its finances.

Silverjet, which offers passengers the Mezzo turnkey service based on eVU players from e.Digital, says it has entered into an MoU with a United Arab Emirates-based investor to secure around $25 million of extra investment. The move was prompted by “recent material increases in fuel prices and tightening of credit conditions, with the result that our working capital has deteriorated and our residual reserves are limited.”

Dated yesterday, the agreement provides for an $8 million equity investment, with the balance coming as a loan. It also says that the investor could put in up to another $75 million to finance further development of the airline. The rejoicing at Silverjet HQ remains muted, however, and for good reason. Earlier this year British financiers the Reuben Brothers announced that they would not after all convert a $20 million loan into equity, as originally planned. What’s more, the new pot of Middle Eastern money is still far from in the bag.

For one thing, the latest investment is not yet the subject of a binding agreement, which Silverjet hopes to see concluded “imminently”. For another, any deal must first be cleared by the airline’s board, shareholders and the UK CAA. “In the unlikely event that these agreements are not completed,” says the airline ominously, “we will have to source alternative means of funding as a matter of urgency.”

It’s all very reminiscent of the on/off funding negotiations that preceded the collapse of Eos at the weekend, and can be little comfort to e.Digital, which jumped aboard MAXjet last year only to see that venture become the first of the premium-only operations to bite the dust. The other casualty of that failure was digEcor, which had supplied MAXjet from the carrier’s launch, only to find that no amount of invoicing yielded any cheques in the post.

Utah-based digEcor will now be closely scrutinising the utterances of L’Avion, which last week trumpeted higher than projected load factors for the month (78 per cent) and the quarter (71 per cent). That’s better than Silverjet, which has been operating in the 60 per cent range, but in the absence of any financial data it’s impossible to judge whether it will be good enough for survival under today’s murderous conditions.