Dan-Air may be preparing for its third refinancing

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The Independent Online
DAVID JAMES, the company doctor who is in the cockpit of Dan-Air, is looking at ways of securing financial backing for the airline to carry it through both next year and 1994.

This confirms speculation that Davies & Newman, Dan-Air's parent, faces the prospect of its third refinancing in as many years.

Mr James, Davies & Newman's chairman, said: 'I am looking at means of generating adequate financial resources to make sure we are able to trade. I am making the assumption that present market conditions will continue and do not show any improvement at all before the spring of 1994.'

Dan-Air has suffered a 'substantial shortfall' in the revenue it expected to earn this summer. A shortage of passengers has held down air fares, leaving the yield much lower than anticapted.

This has meant the airline will not be carrying the expected cash surplus into the winter, when holiday traffic is greatly reduced.

The City now expects Davies & Newman to lose pounds 5m or more this year after a pounds 35.5m loss last year. When Mr James persuaded institutions to invest another pounds 50m in the company less than a year ago he held out the prospect of a pounds 20m profit this year.

Mr James defended the earlier estimate, saying that the whole airline industry expected the value of every seat to rise in 1992. 'That bowled us all out,' he said.

While Mr James continues to look after Davies & Newman's financing, he relinquished the group's chief executive post to John Olsen earlier this year. This has allowed him to take on the rescue of LEP Group, the freight forwarding company where shareholders' funds were wiped out by disastrous investments in property and other sidelines.

Mr James last week took over as chairman of LEP's American security business, National Guardian Corporation.