Kevin O'Toole/ROME

Debonair chairman Franco Mancassola is attempting to pull together a coalition of smaller European airlines to share frequent flier programmes (FFPs) and is hoping to move towards closer links on marketing and maintenance with some.

Mancassola says that around 18 airline executives have agreed to meet later this month to discuss the FFP proposal and he is in conversation with a handful of chief executives in Europe who have "reacted warmly" to the idea of pooling resources in areas such as maintenance and equipment.

Earlier this year Debonair began signing up code-shares with Italy's Azzurra Air and the UK's AB Airlines, while Mancassola says that he is "actively pursuing" mergers and acquisitions. He adds that the airline has also had approaches from major European airlines, offering tie-ups, but is keen to stay flexible "with a cocktail of deals" including code-shares and franchising. The airline began a one-year wet-lease contract for Air France in April on the Paris-Brussels shuttle route.

Debonair is also looking at a new wave of "significant growth" in its network, with destinations in Germany and Italy among the likely routes. Growth was pencilled in for this year, but the airline has struggled to find fresh capacity to add to its fleet of eight British Aerospace 146s. A deal to take five aircraft from Thai Airways collapsed in May after six months of negotiations, with the aircraft instead being snapped up by Jersey European. Debonair has taken on a Fokker 50 turboprop, says Mancassola, although a deal for another 146 is imminent.

Debonair has got early positions on the new Boeing 717, however, with the first due to arrive in October 1999 and with deliveries running at about one a month. The 717s, which are list-priced at $30 million, will be taken on lease, with discussions taking place with potential financiers including Boeing. Mancassola believes the final shape of the Debonair fleet will be about 20 aircraft, divided between the 717 on longer trunk routes and the 146 for distances of around 550-1,100km (300-600nm) and to restricted city airports.

The news comes as Debonair revealed increased net losses of £16.6 million ($28 million) for the 1997/8 financial year to March, its second year since start-up. Mancassola says that losses were to be expected, but concedes that there now needs to be a pause in growth while "-we stabilise the airline". He says that Debonair needs to show profits this year and believes that the returns for July and August will show that the airline has "-crossed the line" into the black.

The results were hit by losses from the cancellation of a deal with the Calabrian regional government to provide air services in southern Italy. Debonair is suing for £30 million after putting two aircraft on hold for more than a month to cover the service. The case had been held up by local government refusal to appoint an arbitrator, but that is now resolved.

Load factors came in at nearly 55% for the 1997/8 financial year and have since risen above 60%, now hitting over 80% on key routes such as those to Rome and Barcelona. Passenger numbers over the year climbed to just short of 600,000. Yields, which have been under continuous pressure, also showed signs of edging up last year and were growing strongly by May.

Source: Flight International