The new airline - to be called JetBlue - will fly out of New York's John F. Kennedy airport to up to 44 locations across America, beginning in January next year.

George Soros: speculator turned investor

It would use a fleet of 82 Airbus A320 planes worth £2.5bn ($4bn) - a boost to the European consortium, including British Aerospace, which makes the plane.

The new airline will be funded by a venture capital fund of $130m. As well as Mr Soros' Private Equity Partners Fund, it will be backed by Chase Capital Partners and Weston Presideo.

Battle for the skies

The new airline aims to undercut existing fares by 50-70%, and add services like live television broadcasts at each seat.

It will be run by David Neeleman, who has already launched two low-fare airlines in the past decade.

He said the planned "mega start-up" differed from other, failed low-cost airlines because it was highly capitalised, had a good management team and mixed common sense with high technology.

The new airline hopes to increase the overall market for air travel, not take capacity from rivals.

"We're not actually looking to steal market share from competitors. We are actually looking to build traffic in the Northeast," said spokesman Gareth Edmondson-Jones.

Efficiency

Mr Neeleman appears to be confident of JetBlue's success.

"We have the formula," he said. "We're going to be the most efficient airline there is."

The carrier will offer a 24-channel satellite television in every one of its all-leather seats, more legroom and increased overhead storage space, he said.

Customers will be able to check in electronically using a special number in an "intuitive" way that will "take just a minute or two," he said.

Profitable business

The US airline business has been showing strong profits growth this year as the booming economy boosts travel.

But start-up airlines have had a difficult time against more established carriers.

Although successful in the West, where Southwest Airlines has developed a low-cost strategy from smaller airports, new airlines have been less successful in the densely populated regions of America.

Mr Soros is increasingly investing in real assets, including property in the UK, after spending most of the l990s speculating in currencies.