Coventry Airport is used mainly for freight at present

Thomsonfly.com will operate between the UK and 10 European destinations, including Rome, Naples and Ibiza.

Thomson, owned by German holiday giant TUI, said the new airline would begin operating from 31 March, 2004.

The UK-based company said it expected to create around 200 jobs, with flight staff being supplied by Thompson's main carrier Britannia Airways.

'Self-packaging'

The new no-frills airline will fly to Palma, Valencia, Rome, Naples, Nice, Malaga, Venice, Pisa, Ibiza, Marseilles and Jersey.

"The travel market is changing as we see trends towards self-packaging, short breaks and a demand for greater flexibility," said Thomson Holidays managing director Chris Mottershead.

"We want to take advantage of the huge growth in the flight-only business using the power of the Thomson brand."

The birth of Thomsonfly should boost employment opportunities in the West Midlands region.

More than 200 jobs will be created at Coventry Airport in the first year, with the surrounding regions also expected to benefit as increased numbers of passengers boost local businesses.

At the moment the airport is almost exclusively used for transporting cargo and has one of Europe's biggest parcel distribution centres.