UK tour company MyTravel is launching a new no-frills airline, intensifying competition in the budget air travel sector dominated by Ryanair and Easyjet/Go.

Our unique operating model will allow us to pass on low operating costs to the customer, while maintaining the highest standards of service and reliability

MyTravelLite chief Tim Jeans

The new airline, MyTravelLite, is due to begin services on 1 October this year.

Based at Birmingham airport, MyTravelLite will initially fly to Belfast, Geneva, Alicante, Malaga and Beauvais airport near Paris.

One-way fares will start at �19 to Belfast, �24 to Paris and Geneva, and �29 to Alicante and Malaga.

MyTravelLite will start with a fleet of just two aircraft, but will add two more in time for the summer of 2003.

The airline is also in talks with Glasgow Prestwick airport about launching services to and from Scotland.

Low fares pledge

MyTravelLite managing director Tim Jeans - formerly sales and marketing director at no-frills pioneer Ryanair - said the new airline would offer travellers "the lowest airfares from the region's largest and most convenient airport."

"Our unique operating model will allow us to pass on low operating costs to the customer, while maintaining the highest standards of service and reliability," he said in a statement.

Like the established no-frills carriers, MyTravelLite plans to encourage passengers to book flights online in order to hold down costs.

It also plans to tie in its flights with offers to stay at hotels owned by its parent company.

MyTravel, formerly named Airtours, made clear its intention to muscle in on the lucrative budget airline market in May this year.

The announcement came just a week after Easyjet, one of the strongest contenders in the sector, said that its talks to buy rival Go had been successful.

Growth prospects

MyTravelLite's debut comes amid spectacular growth in the no-frills travel sector.

Easyjet said on Wednesday that passenger numbers for July had grown by 62% on the year to just over one million, while its new subsidiary Go saw traffic jump by 59% to 645,600.

The combined figure confirms that the Easyjet/Go has displaced Ryanair - which carried 1.4 million passengers in July - as Europe's largest budget carrier.

But analysts predict that the rise in passenger figures will level off over the next two years, forcing budget airlines to compete more aggressively.

Shares in MyTravelLite's parent company were up 1 penny at 140.5p in late morning trade.

Easyjet was 10p higher at 370p while Ryanair was up 5p at 392.5p.