Airline shares are popular these days, with stocks like Ryanair enjoying a huge following in Ireland and the US. Ryanair is expected to take a London listing later this year with the aim of adding British institutions to its fan club.

One other airline has beaten Ryanair to a London listing, with the flotation this week by AB Airlines, the minnow that operates routes between Gatwick and Shannon, Lisbon and Berlin. AB has also just tied up a deal with Aer Lingus to operate services to Shannon from Stansted and Birmingham, bringing passengers in to link up with Aer Lingus transatlantic routes.

Compared to Ryanair, AB is a small operation with a market capitalisation of £25 million sterling at the placing price of 95p a share. AB has raised £8.3 million sterling after selling just over a third of the airline to institutional investors. The money is being used to increase then fleet and pay deposits on six new Boeing 737s.

AB is also a lot different from Ryanair as it has still not made a profit despite being in business for five years. Surprisingly, the flotation document does not include any profit forecasts for the current year.

AB will not be competing directly with no-frills airlines like Ryanair, Debonair, easyJet and British Airway's Go, but there is a fear that inevitably a small airline like AB will come up against the low-cost carriers. Whether AB will be in a position to compete at that level is a major question that has to be answered before anybody should put money into an airline that has never reported a profit.