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Friday, October 1, 1999 Published at 13:29 GMT 14:29 UK

Business: The Company File

Debonair's dream brought down to earth

Debonair planes are now grounded

Debonair's aim was always to be "the best little airline in the world".

But with the receiver called in and its planes grounded, that dream appears to have been shattered by the harsh realities of an increasingly cut-throat budget airlines market.

Debonair was created in 1996 to what seems to be a blueprint for the budget airlines born out of the market deregulation in the early 1990s - colourful livery and an even more colourful chairman.

Virgin has Richard Branson, easyJet has Stelios Haji-Ioannou, and Debonair has Franco Mancassola.

Franco is the archetype of the self-made man, an Italian who came to England to find his fortune, started out sweeping floors and ended up as a big player in the US Continental Airlines.

Charismatic chairman

After leaving Continental, he set up his own airline, Discovery Airways, in Hawaii.

He sold Discovery in 1990, and then began looking around for the capital to set up in Europe.

He put in £500,000 of his own money, and raised a further £14.5m with the help of long-time associate Anthony Silverman.

Franco became the face of the airline, notably through Debonair's "Franco Says" advertising campaign.

With his latin charm, appealing manner and penchant for racing cars, Franco matched his Virgin and easyJet counterparts in the charisma stakes.

[ image: EasyJet's larger-than-life chairman Stelios Haji-Ioannou]
EasyJet's larger-than-life chairman Stelios Haji-Ioannou
However, where he crucially failed to match them was in their financial clout.

"Nobody has tried starting a new airline without having vast private or corporate funds", he said in a 1997 reference to his two rivals which now seems to have come back to haunt him.

The lack of a deep well of resources to fall back on made Debonair the most likely casualty when the big airlines belatedly woke up and realised the short-haul market was changing without them.

When British Airways launched Go in 1998, Franco Mancassola tried, and failed, to get a European Commission ruling that it was operating uncompetitively - aware of the threat that such a big player offered in such a small market.

Debonair was one of the first companies to float on the pan-European Easdaq stock market, but forecasts that it would be making £16m a year by 1999 failed to materialise and its share price plummeted.

Size matters

In the last year, Debonair has seemed to be caught between two stools.

Where other budget airlines such as easyJet have gone all out for the no-frills, low-cost angle, Debonair has tried to be a budget airline that offers non-budget extras.

A bid to attract business travellers by offering Business Class perks backfired as it failed to attract enough corporate clients while deflecting it from the budget market and giving it higher costs than its rival.

The future of Debonair now depends on it finding a buyer - probably one of the larger airlines that has been its competitor.

Whether "the best little airline in the world" really was the best, it was certainly little - and appears to have found out the hard way that in some businesses, size really does matter.

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