In a move which will see the airline expand into Europe, Flybe has acquired a 60 per cent share in Finnish domestic carrier Finnish Commuter Airlines. The deal is worth £22.6 million and will be a joint venture with Finnair. The move follows an announcement that Flybe has incurred a £4.3 million bottom line loss and orders for new aircraft valued at £850 million.
The new airline will be called Flybe Nordic, the board of which will consist of three Flybe representatives and two members of the Finnair team. As well as a takeover of Finnish Commuter Airlines, the deal includes a stake of 46 per cent in Finnish Aircraft Maintenance and 57 per cent ownership of Finncomm Training Centre.
According to Niall Duffy, head of public affairs at Flybe, the tie-up will allow the airline to enter into the Baltic and Nordic markets with minimal levels of risk. Finnish Commuter Airlines has 15 planes and flies 90,000 passengers each year throughout the region. The carrier currently has a turnover of £81 million per year.
According to Duffy, the new airline will tap into the Baltic’s growing economic prospects. Flybe Nordic is expected to run at a loss for the remainder of the year, but should start to break even in the next fiscal year. By the airline’s second full year of operations it is predicted to start generating around a 15 per cent return.
Flybe also plans to open up routes to Asia from Finland but does not currently plan to fly between Finland and UK airports.
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