EasyJet's announcement that it plans to fly from Newcastle marked a further growth in a burgeoning industry once greeted with disdain by sceptics.

When they first took to the air many shunned cheap airlines as a second rate service, but now airports are falling over each other to capitalise on their soaring success.

So yesterday's announcement by Newcastle International Airport, following months of negotiations was a big coup for the region. EasyJet, founded by Stelios Haji-Ioannou, has grown from a Luton-based airline offering two routes to Glasgow and Edinburgh, served by two Boeing-737 aircraft.

In August 2002, easyJet merged with Go-fly, offering 88 routes from 36 European airports and flying 64 aircraft. The airline reported pre-tax profits of £340m during the financial year to September 2001.

Low cost airlines offer cheaper fares by aggressively controlling costs. They cut out frills such as in-flight meals and allocated seating.

They also promote the use of internet booking and initially involved flying from secondary lower-cost airports. While Ryanair has stuck to this policy easyJet has moved to primary airports.

The aftermath of September 11 saw larger carriers bearing the brunt of passenger's safety fears.

Ironically the tragedy provided an added stimulus to low budget operators, who were able to pick up cut-price aircraft on the market.

The low-cost market is becoming increasingly competitive with Ryanair and easyJet battling for supremacy in Europe.

Last month Ryanair effectively gave away almost a million flights to Irish and continental destinations for just £1 a piece (excluding airport tax), while Bmibaby announced it was handing out 20,000 free tickets to coincide with the launch of new services from Cardiff.

British Airways has also jumped on the bandwagon, slashing prices on some of its short-haul routes.

Any misgivings that yesterday's announcement would have an adverse effect on the North-East travel agency trade was dispelled by Travel Care, one of the key players in the region.

A spokesman said: "People will still need to book find somewhere to stay and the experience of Ryanair at Teesside International Airport has shown that the potential for independent holidays will increase."