WORLD Airlines, which this summer offered business travellers a luxury route to the Netherlands from London City Airport, has collapsed amid a fierce price war.
Last November a consortium of companies controlled by Mr Dermot Desmond purchased World Airlines for £14.5 million.
World Airlines, whose sole route served Amsterdam's Schiphol, had its leased BAe 146 jet impounded at London City Airport last week because it had not paid landing fees. The airline maintained then that the bill could quickly be settled. But the airport said yesterday that "substantial overdue payments remained and that World Airlines was no longer flying.
Control of World Airlines - which was unavailable for comment yesterday - is understood to have passed recently from Mr Nick Stolberg, a British entrepreneur, to Star Airlines, a Turkish cargo carrier.
"They do not appear to have put more money into the company," said Mr Richard Gooding, London City's managing director.
The damage to World Airlines came three months after it began operating, when Air UK launched a cheaper service between Schiphol and London City.
Air UK operates other routes from Stansted Airport in Essex. The company is a 45 per cent owned affiliate of KLM, the Dutch flag carrier which small rivals accuse of orchestrating a predatory pricing policy.
EasyJet, a ticketless airline which, since April, has served Amsterdam from Luton, sent KLM a lawyer's letter two months ago accusing it of abusing its dominance of the market.
This came after KLM more than halved its discount fares to 190 guilders (£69) return, undercutting the British carrier.
Mr Stelios Haji Ioannou, EasyJet's chairman, yesterday sent a complaint to the EU competition directorate in Brussels.
It alleges that KLM is selling seats below cost with the aim of forcing his airline out of Schiphol.
The document cites as evidence a Financial Times report from August, in which a KLM official acknowledged that an internal memorandum had described the price cuts as necessary "to stop the growth and development of EasyJet..."
The Dutch airline yesterday declined to say whether it was losing money on the route or to indicate its market share.
Mr Haji Ioannou is seeking redress under Article 86 of the Treaty of Rome, which is intended to ensure a company commanding any market does not use its position unfairly towards competitors.
In a speech last month, Mr Neil Kinnock, the EU Transport Commissioner, praised EasyJet and other new entrants to European routes for bringing down the cost of travel.
He pledged "more focused attention to potential abuse of market position by dominant carriers in specific national and regional markets within the EU".
