Chamber of Commerce President Charles Gosling has warned that Government must not get sucked into subsidising a new airline which is hoping to operate out of Bermuda.

Bermuda Star Ltd., which applied to incorporate on the Island in May, last week sought permission to fly direct to Manchester, England, Cologne, Germany, Newark, New Jersey, Orlando, Florida, and Chicago.

Mr. Gosling said more competition would be welcome because he questioned whether the Island gets good value for money from existing carriers.

But he said Caribbean governments which became too dependent on new start-up airlines ended up ploughing millions of dollars in subsidies to keep them going.

He told The Royal Gazette it would be more sensible to try to attract successful low-cost airlines like JetBlue and Southwest Airlines instead.

Transport Minister Dr. Ewart Brown welcomed the Bermuda Star application because it may bring more competition and lower fares, but he said Government would not be sinking any money into the venture.

"I question whether we get good value for money and would like to see some study into this," said Mr. Gosling.

"I would like to see us looking at an established airline such as JetBlue or Southwest Airlines that might look at the value for money ratio better than a start-up airline.

"One of my main concerns of any airline, particularly one fully reliant on supplying Bermuda with international access, is that at some point these countries, like in the Caribbean, have had to come in to bail out the airline through heavy subsidies.

"I can understand the Minister of Transport saying, and fully believing, Government is not interested in sponsoring the venture, but I can really see at some time in the future, if we become heavily reliant on this airline for passenger lift, that there might come a time when if the Bermuda Government might not subsidise them, we could lose a portion of passenger lift for a season."

Blue Star filed an application to fly to the Air Transport Licensing Board, which appeared in the legal notices of The Royal Gazette on Friday.

The company was set up by Leopold Kuchler, the Austrian honorary consul in Bermuda, and his wife Cynthia. Mr. Kuchler would not reveal who else was involved in the venture.

Dr. Brown told The Royal Gazette on Tuesday: "I'm aware of this initiative and the Ministry has been aware of it for some time. We have been facilitating them and we wish them luck.

"We are definitely interested in any initiative that could potentially increase service to and from Bermuda and provide that service at a lesser cost.

"Our position is that here is a Bermuda company which is interested in helping us achieve one of our objectives and we are facilitating them and being very supportive, but we are not involved in the business operation.

"Increased airlift is always welcome because it provides more choice for travellers and if this company sees this as viable, we will be happy to provide a great airport service."

Shadow Tourism Minister David Dodwell said he welcomed the prospect of any new, well financed airline.

But he said Government should subsidise airlines currently flying to Bermuda - or potential new partners such as JetBlue - to get prices down.

"I strongly believe it is time to consider some level of subsidy or guarantee to the airlines, and this government needs to be constantly in the face of the airline industry," said Mr. Dodwell.

"And after four years of PLP government we still don't have an airline strategy."He said he was not sure if the demand was there from Cologne for Bermuda Star and thought Miami would have been a preferable Florida airport to the company's preferred choice of Orlando.

The Bermuda Star flight to Manchester would challenge British Airways' monopoly of direct flights between the United Kingdom and the Island. BA has said it would welcome the competition.

The other airline Bermuda Star would compete against directly would be Continental on the Newark route.

Continental spokesman David Messing said: "We are not specifically aware of that group other than the news coverage.

"We are quite accustomed to competing with new airlines as well as established airlines on many routes.

"The US aviation business is defined by strong competition where consumers have a choice of more than one carrier.

"We are very comfortable with new competition and we think we can succeed in the market that other airlines are flying because of what we offer consumers.

"One thing that does distinguish us is that our flight from Newark is hooked into a large hub for other destinations such as Pittsburgh and Buffalo."

Bermuda Star's application did not state when the company wants to begin operations, but it is understood to be next year.