Fly First in £23m bid for take-off to New York

HAMISH Taylor, the former Eurotunnel chief executive, has appointed broker Bell Lawrie to raise £23.5m for his planned business-class transatlantic airline.

Bell Lawrie has drawn up a prospectus for Fly First, the airline which Taylor hopes will launch luxury 48-seater flights between London and New York in November.

Chief executive Taylor has assembled a team for the venture which he hopes will create a revolution in luxury air travel. The latest recruit is Lord Wade of Chorlton, the former joint treasurer of the Conservative Party, who has joined as a non-executive director.

Peter Villa, the former managing director of Air UK, is operations director for the company; Bill Troup, the former director of equity finance at Royal Bank of Scotland, is finance director; and John Campbell, the former marketing and sales director of Scottish Mutual, is chairman.

A source at Bell Lawrie said: "The directors have lots of contacts in the investment community and among high net worth individuals, and that is where they expect to raise the money. There is evidence that their business model has been well thought out."

Fly First plans to float on the Alternative Investment Market within three years, a move which its prospectus says would "raise the profile of the company and potentially enhance the attractiveness of Fly First as an investment opportunity."

The document points out that Campbell chaired Cavanagh, a specialist financial services company, when it floated on AIM.

Fly First plans to charge an average of 3,360 for a return ticket between London Luton airport and Newark, near New York, in line with first-class fares on regular airlines.

Taylor, whose plans were revealed in Scotland on Sunday three months ago, estimates that Fly First can break even with 16 passengers per flight, a number which it expects to attract within 10 months of its launch.

The airline will carry a maximum of 48 passengers in Boeing 757-200 aircraft, which are built to take up to 228 passengers. Each aircraft will be divided into four cabins each containing 12 seats which can be folded down into flat beds.

Luxuries include changing rooms, telephones and fax machines on board and chauffeur drive to and from each airport.

The company will use its own private terminal at Luton, allowing a 45-minute check-in rather than the standard two hours. It aims to be the first European airline to touch down in New York every day with a projected arrival time of 9am after taking off from Luton at 6.45am.

Fly First plans to lease two commercial aircraft and will run one flight in each direction every day from November this year, adding a further flight every weekday from 2006.

In its prospectus, the company says: "The directors believe that the Fly First economic model is different from those of both typical low-cost and traditional, full service airlines. These airlines target high volumes of passengers from the mass market at relatively low average yields and therefore require significant investment for both marketing and development of route networks.

"Fly First’s economic model, by contrast, is targeted at the more specific and identifiable business-class market and requires lower volumes of business fare-paying passengers."

Fly First’s founders have invested 662,000 in the business so far and plan to invest a further 111,000 if the minimum subscription level is reached.

Taylor, who was managing director and then chief executive of Eurostar between 1997 and 1999, made his name as brand manager at British Airways where he oversaw the introduction of beds in first-class cabins.

BA could be hit the hardest if Fly First is successful because it is the largest carrier of premium class seats between London and New York with a 52% share as at October last year.

Fly First’s board also includes Keith Campbell, operations director of Edinburgh Air Centre and the youngest person to cross the Atlantic in a single engine aircraft, as commercial director.