Dan-Air forced down with image-fatigue: Michael Harrison charts the course of the 'cheap and cheerful' carrier that never managed to be taken completely seriously

IN THE END Dan-Air could never shake off its image as the airline that flew by the seat of its pants. No matter that it was Britain's longest-established and second-biggest carrier and boasted a modern fleet; it was, is, and will always be remembered by the cruel monicker of Dan Dare.

Its reputation was one of cheap cheerfulness, of sozzled and sunburnt holidaymakers on aircraft where anything could, and often did, happen, including toilet doors departing their hinges in mid-flight.

Had it hung on for another three months Dan-Air would have been celebrating its 40th birthday. It was founded in 1953 by the London-based shipbroker Davies and Newman, whose initials gave the airline its name. Its maiden flight was Southend- Manchester-Shannon, its first aircraft a Douglas DC3 'Dakota'.

It moved its main operations to Gatwick at the start of the 1960s, a decade that saw Dan-Air expand as a charter airline. By 1968, when it launched its first transatlantic charters, it was operating a fleet of 49 Comet 4s, more than any other carrier.

In 1971 Fred Newman, the founding chairman, took Davies and Newman public through a flotation. With the stock market quotation came respectability, and scheduled services began to be tacked on to the charter operations.

By 1984 it was carrying a million scheduled passengers a year and riding high. Two years later, Davies and Newman reported profits of pounds 6.7m.

But the expansion into the highly competitive and expensive scheduled market coincided with recession, an unprecedented downturn in air travel and a slowdown in package tours, affecting what remained of its charter business.

By 1989 profits had vanished. In 1990, it made a pre-tax loss of pounds 38.7m. By the autumn of 1990 Dan-Air had already been refinanced once by its banks. Its shareholders had become restive. Mr Newman stood down as chairman to be replaced by David James, a 'company doctor' with a 100 per cent success record. Dan-Air was the patient that would not respond.

Having organised a second refinancing, Mr James responded to falling passenger numbers by expanding his way out of trouble. In the past 12 months five new destinations were added to the scheduled network.

Mr James warned that his strategy would be costly at first. In 1991 Dan-Air lost pounds 35m, but the projection was for a pounds 20m profit this year. The gamble failed. Passenger numbers and yields flickered upwards briefly in the spring but by the summer it was obvious that the hoped-for recovery in the market was not to come this year. Dan-Air lost pounds 16m in the first nine months and was heading for a pounds 30m loss for the year.

Faced with falling into the embrace of the receivers or Lord King's British Airways, Mr James chose the latter. Did he consider he had failed? 'I think it is an unfortunate outcome for the shareholders,' he said last night. 'But it is a success that we have won the survival of so many jobs and achieved something from the wreckage.'

(Photograph omitted)