07/07/2011
Steven Birch
Flybe has revealed that it is moving forward with its expansion plans after entering a joint venture to buy a Finnish airline.
Recently, Flybe reported a £4.3 million loss in its maiden annual results, but this has not stopped it looking to buy Finnish Commuter Airlines (FCA) for 25 million euros (£22.6 million) in partnership with Finnair.
The joint venture will be known as Flybe Nordic, with Flybe taking a 60% slice in the company and Finnair holding the remaining 40%.
Since a flotation last December Flybe has seen its shares fall by an estimated 37%, partly due to a lack of acquisitions, so this deal could be what sparks an upturn in fortunes.
FCA is the largest domestic airline by operations in Finland, carrying an estimated 900,000 passengers every year in the Finnish domestic, Nordic and Baltic regional markets. Currently, it has 15 aircraft and an annual turnover of around 90 million euros (£81 million).
The airline also revealed it is in talks with a number of European airlines as it considers ways to secure other joint ventures and acquisitions for investors.
Following the announcement shares grew by 2.2% and the Flybe Nordic joint venture will undergo a major marketing campaign to promote Flybe in Finland.
Jim French, chairman and chief executive of Flybe, said: "Partnerships and acquisitions are at the core of our European growth strategy, which is to export our strong and proven UK business model to become Europe's leading and most profitable regional airline."
