After weeks of speculation, local start-up airline FlyGibraltar finally confirmed its plans to launch services from Gibraltar to a range of cities in the UK and Ireland as from next year.

The project will prove a boost to the local economy and was unveiled just weeks before ministers signed the long-awaited trilateral agreement between Gibraltar, the UK and Spain, which has at its core a deal to dramatically expand use of the local airport.

The announcement followed news that existing airlines had reached an agreement with the Ministry of Defence over the contentious issue of landing fees at the local airfield, which is controlled by the British military.

Taken as one, the various developments bode well for the future of Gibraltar airport, which seems poised to see a sharp rise in traffic – and competition - over the coming months.

FlyGibraltar will operate as a low-cost airline and is financed by OEM, the company run by Irish businessman Robert Noonan and which is already engaged in major projects in Gibraltar, including the affordable housing development Nelson’s View and Cumberland Terraces.

The airline will use chartered passenger planes that will start and end their flights in Gibraltar, spending the night on the tarmac here.

Operations will commence with two Boeing 737-300s, each with a seating capacity of 148 passengers, leased from UK-based Astraeus Airlines, which will also provide crews and maintenance staff. The planes will be painted in FlyGibraltar’s own livery.

FlyGibraltar has been busy securing the necessary licences and permits over the past few months, and expects to start flights by spring of next year.

Initial destinations will likely include London Stansted, Manchester, Birmingham and Bristol in UK, plus the Irish cities of Dublin and Cork.

In common with the other two airlines, it has already reached an understanding with the MOD on the thorny issue of runway fees.

In the UK, the company’s advisors include Hugh O’Donovan, an aviation specialist with Quadrant Chambers in London who helped set up EasyJet 10 years ago.

“Fly Gibraltar will be a low cost airline but will provide some frills, as in on-board meals and seat allocations,” Mr Noonan told reporters at a press conference this summer.

He added: “The airline will be carrying freight in and out of Gibraltar. It is intended to target a market within a 50-mile radius from Gibraltar, to include business, leisure and frequent travellers. Gibraltar and its hinterland will also be promoted in the UK and Irish destinations.”

The new airline’s managing director, Gibraltarian Mark Carreras, said the overseas property owner market would be a natural target for the new operation but considerable traffic would also be derived from pure business and holidaymakers both to Gibraltar and to Spain.

“We know that 65% to 70% of the passengers currently flying into Gibraltar cross over to Spain and I would not expect that to be any different from our operation,” said Mr Carreras.

Although specific route prices have yet to be announced, Mr Carreras said that prices will be as low as from £29.99 one way.

The new venture was warmly welcomed by the Gibraltar Government, which had long been in discussions with several airlines over proposals to launch new services to and from the Rock.

FlyGibraltar’s announcement proved a fillip for the local administration, which had expressed disappointment over recent news that existing airlines GB Airways and Monarch were ending flights to Heathrow and Manchester respectively. Monarch pulled its Manchester service at the height of the row over MoD landing fees, which are higher than in neighbouring Spanish airports and, according to the airlines, are prohibitive. GB Airways meanwhile plans to end its Heathrow flights later this month as it moves to expand its services to Morocco this winter and focuses its local routes on Gatwick.

Joe Holliday, Minister for Trade and Industry, said both the tourism and business sectors would benefit from FlyGibraltar’s new services. The company would also create new job opportunities for locals.

“Discussions with FlyGibraltar have been on-going with the Government for some time now, considering various operations which would be of most benefit to Gibraltar’s business and leisure travellers’ needs,” he said.

“It is encouraging to see that a company that has already made significant investments in Gibraltar is willing to embark on this venture.”

“The initiative is typical of the investor confidence that exists in Gibraltar’s current economic climate.”