THE independent Irish airline Cityjet has ended its franchise agreement with Mr Richard Branson's Virgin Atlantic.

The Irish airline, which will operate under its own brand name from the end of this month, had previously paid a set royalty fee to Virgin for the use of its name.

The decision to end the two and a half year old franchise deal was mutual, according to Cityjet chief executive Mr Pat Byrne, who explained that it was prompted by the need to avoid confusion between the Virgin CityJet service and Virgin's proposed new European operation.

Virgin recently bought a 90 per cent stake in a Belgian airline and plans to develop a new Virgin Express no frills/low cost service between major European cities.

Mr Byrne said the new Virgin Express would be different from Cityjet, which concentrates on high yielding business travellers on its routes from Dublin to London, Brussels, and Malaga. "There would have been huge confusion between the two," he said.

Under the deal, Cityjet will remain Virgin Atlantic's preferred carrier to Dublin and the British airline has agreed that it will not compete on the Dublin London City Airport route for a specific time period.

Mr Byrne said conclusion of the franchise agreement could actually help expand the company's business.

CityJet is currently in talks with a number of European carriers about possible agreements, and wants to expand its continental business.