Debonair float to raise pounds 25m for expansion

Three main shareholders in Debonair, including the chairman and chief executive, Franco Mancassola, stand to make a profit of more than pounds 12m when the cut-price airline floats on the fledgling European stock market, Easdaq, next month. Besides Mr Mancassola, Dr Wayne Stern, a director, and Anthony Silverman, a shareholder, stand to make a profit of more than pounds 4m each.

Debonair's 500 private shareholders can also expect a windfall from the flotation, which will value the group at up to pounds 110m. It is raising up to pounds 25m, selling 5 million shares priced at between 400p and 500p each.

Debonair only started flying planes last year. Since then it has expanded rapidly and now carries 60,000 passengers a month.

From its UK base at Luton airport it flies to Barcelona, Copenhagen, Dusseldorf, Madrid, Munich and Rome. It will use the pounds 25m to increase the frequency of its services and to fly to more destinations. "We will add new routes, buy new planes and keep a war chest for a rainy day. There is no such thing as an underfunded airline," said Mr Mancassola.

As part of the expansion plan, Debonair is going to increase its fleet from six to 10 aircraft within the next 12 months. It hopes to introduce flights to Scandinavia and southern Europe in the next few years.

Debonair lost pounds 15m last year, a result of developing its network, but it hopes to make a profit by 1999. Mr Mancassola plans to take advantage of the growing deregulation of the European airline industry which has seen the emergence of several cheap airlines competing with established carriers.

It is following in the footsteps of the Irish no-frills carrier, Ryanair, which has also announced flotation plans. But Mr Mancassola believes Debonair is different from other cheap carriers. "We have much more generous leg room, we give free drinks and we are installing video-on-demand units, unlike other airlines I could mention," he said.

Mr Mancassola previously worked for Continental, helping the US airline to start up international airline links. Eventually he decided to set up his own airline, Discovery Airways, which operated out of Honolulu in Hawaii. When he sold that business seven years ago Mr Mancassola made, in his own words, "a decent profit". But the sale meant he was prohibited from setting up another American airline. That was when he decided to move back to Europe.

"I decided that I did not want to play tennis of golf for the rest of my life and moved back to Europe instead," he said. With the help of Mr Silverman, who runs a US security business, he raised pounds 14.5m to fund Debonair's expansion.

Mr Mancassola plans to meet institutions over the next month to whip up support for the deal. The shares are likely to be listed on Easdaq at the end of next month.

Debonair's decision to float on Easdaq will be big boost to the market which has failed to spark the imagination of companies and investors alike and has only 10 members at present. "We wanted to join a European market because we are a European company," said Mr Mancassola.