London cable car offers investor's-eye view of the Thames

Britain's first urban cable car has begun ferrying passengers across the Thames after Boris Johnson launched it by declaring that his first trip made him feel like the Russian cosmonaut Yuri Gagarin.

The £60m system was paid for with £36m from the Dubai-owned airline Emirates, giving it naming rights for 10 years, including placing its brand name on the London Underground map. A further £8m came from the European Regeneration and Development Fund, which the London mayor joked was a better use of money than Brussels paying off the Greek debt.

The system is called the Emirates Air Line and travels from the Greenwich peninsula close to the O2 arena on the south side of the river to the Royal docks close to the Excel exhibition centre on the north bank. It takes five minutes each way and costs £3.60 on an Oyster card or £16 for 10 journeys.

The O2 and Excel are both Olympic venues and Emirates, which is not an Olympic sponsor, is set to benefit from having the cable car open in time for the Games, which start on 27 July.

"It is a remarkable deal for the taxpayer and it shows what you can achieve working with the private sector in tough financial times," Johnson said. "Thousands of jobs are going to be created around us. The history of London shows that great economic growth has always been preceded by transport infrastructure investment."

The cable car has the capacity to carry up to 2,500 people an hour in each direction, the equivalent of 30 buses.

Viewed from one of the 34 cabins, which rise 90 metres over the Thames between spiralling pylons designed by the architects Wilkinson Eyre, the immediate areas it serves appear sparsely populated. The closest housing to the south terminal is the Millennium Village, a regeneration scheme promoted by John Prescott, and it is surrounded by many hectares of car parking for the O2 arena and the now defunct David Beckham football academy. On the north side, heavy industry surrounds the drop-off point, including waste depots, cement plants and builders' yards, but there are also blocks of flats, a new facility for the electronics company Siemens and the Excel centre.

"It is a viable means of public transport," said Peter Hendy, London's transport commissioner. "These scrap yards and rubbish dumps are being replaced by blocks of flats and high-technology jobs. We expect this to have a serious public transport use now it is opened."

Johnson predicted it would become a tourist attraction in its own right and would help focus investors on the potential in east London.

"It is a staggeringly beautiful view of London," the mayor said. "It is a panorama of the most opportunity-rich area of the city and people are already showing a real interest in buying into it. People are coming from all over the world for the Olympics and I want them to see the areas they can invest in."