MAX KINGSLEY-JONES / LONDON

Duo, the Birmingham-based British Airways franchisee that was formerly Maersk Air UK, is ending its agreement with the UK flag carrier as it restructures its operations.

Rebranded Duo, which emerged following the sale by parent Maersk Air to management earlier this year after a series of losses, operates its three Bombardier CRJ200s and five CRJ700s exclusively for BA from Birmingham.

The reorganised network will add a second base in Edinburgh in October and some services from Birmingham will be dropped. Sources close to the two airlines say that all services will be operated under Duo's own identity from October, with the CRJs being progressively repainted into the new "Duo.com" livery.

The sources say the decision to axe the BA link, which is expected to be confirmed this week, is "mutual". BA's regional arm CitiExpress already has a major hub at Birmingham and is expected to fill the void left by the ending of the Duo franchise.

Meanwhile, Air Southwest, which has been formed by Plymouth City Airport operator Sutton Harbour Holdings, is taking over services from Plymouth and Newquay to London Gatwick in October that are now operated by CitiExpress. Headed by former Brymon Airways managing director Malcolm Naylor, the airline is initially leasing two ex-CitiExpress Bombardier Dash 8 Q300s from GE Capital Aviation Services, and has an agreement to take over the BA division's Gatwick slots.

As part of BA's Future Size and Shape restructuring programme, CitiExpress is reorganising its Dash 8 fleet by withdrawing all Plymouth- and Newquay-based aircraft - the former Brymon Airways operation - and redeploying them to Manchester.

BA has agreed to help Air Southwest through the start-up phase by making resources available, including pilots.

Source: Flight International