We've all seen all-economy budget airlines, officially dubbed low-cost carriers (LCCs). Now, get prepared for its exact opposite, the all-business class airline. Logically, it should be called a high-cost carrier but isn't, because it's actually offering lower-cost business class seats.

Maxjet is one of a handful of such all-business-class carriers. It started in 2005 with a single transatlantic route between New York and Stansted airport, near London. Based at the Dulles International Airport near Washington DC, Maxjet now offers four weekly flights between Stansted and Dulles, and an equal number between Stansted and Las Vegas. This week, it starts a new service, from Los Angeles.

Luxury for less
A business-class ticket to London costs $2,000 on Maxjet, compared with $4,000 or more on traditional carriers. This gets you gourmet meals, deep-reclining leather seats and on-demand entertainment, on spacious, reconfigured Boeing 767s.

Maxjet is one of a handful of entrants in the 'all-business' niche, which logically seems very viable. But, though is talking in terms of growth, there are plenty of obstacles in the way, one of the most important of which is that there's no indication that it's profitable.

But, after a very shaky start, Maxjet's flights have finally started to fill up. In June, it had an occupancy of 83 per cent, up from 64 per cent a year earlier. In July, occupancy was 75.5 per cent. Analysts say the figures are similar to occupancy rates for most large airlines. Maxjet's planned expansion is all overseas, and the airline has got permission from the US Department of Transportation to fly to 89 countries.

Small may not be beautiful
But it has problems of scale. To save on high fuel costs, Maxjet selects its departure dates and times to maximise the number of passengers. But this can be a hassle. If the airline cancels a flight, there's nothing till the next day.

This means problems for both passenger and airline, as Maxjet has to put its delayed passengers in hotels or buy tickets on other airlines for them, sharply increasing costs. Large airlines like British Airways (BA), in contrast, will have at least one or two more flights the same day.

Notwithstanding this, the airline has developed a reputation for its service: "There's nothing in comparison; you're pampered left and right," say passengers. Maxjet was ranked the second-best international airline in a poll of subscribers of Travel and Leisure magazine.

Branson busts in?
But specialty carriers like Maxjet may soon face competition from traditional airlines. Virgin Atlantic and British Airways are both discussing plans to offer all-business services within the next 12 to 18 months.

But some experts say Maxjet has the potential to be the JetBlue of the international sector. The airline's low-cost structure and business model can keep it "under the radar screen" of the big carriers and keep the company flying, they say.

Maxjet itself is in high growth mode. It has hired 100 workers over the past year, most in the Washington DC area, taking its roster to 300. Earlier this year, it moved into larger premises at the Dulles airport.

It is also setting up new routes. Just last month, the airline applied to the Department of Transportation to get a licence for an all-business round-trip service from Seattle to Shanghai for $4,000 per ticket, starting in 2009.

But its China bid may not materialise. There are only four new routes available in 2009 and just one is open to airlines that do not already fly to China. Big boys like Continental Airlines and Delta are in the fray, and Maxjet's proposal may just get shanghaied.

In June, the airline raised about $95 million in an initial public offering (IPO) on the Alternative Investment Market, a subsidiary of the London Stock Exchange that lets smaller companies list shares in a less stringent regulatory environment. But since the IPO, Maxjet's shares have slipped about 17 per cent. That may change if Maxjet makes a profit. The airline is scheduled to file its first quarterly results in September.