Flybe crosses Finnish line

REGIONAL airline Flybe yesterday launched its long-heralded expansion into Europe with a joint venture in Finland.

The UK carrier, led by Scots-born chief executive Jim French, is buying Finnish Commuter Airlines (FCA) in partnership with Finnair, in a €25 million (22.5m) deal that will see Flybe run the airline and take a 60 per cent stake.

Flybe will pay €12m for its larger stake and rename the acquisition Flybe Nordic, operating under its own livery.

FCA, which was privately owned, is Finland's largest domestic airline by number of flights, flying around 900,000 passengers per year. It has 15 aircraft, 350 staff and an annual turnover of about €90m.

Flybe communications director Niall Duffy said the airline planned to use the joint venture to move into growing markets in the Baltic, where nations such as Estonia have been enjoying a strong economic recovery.

Duffy added: "The beauty of this deal is that it's a combination of acquisition and joint venture, with much lower risk than if we were looking to do it organically.

"At the moment, we are going to concentrate on building the business in the Nordic and Baltic markets. We will be looking to join the dots (with the UK operation], but not yet."

Flybe has seen its shares fall by about 37 per cent since its flotation in December - partly due to a lack of acquisitions. The airline has said it is in talks with an array of European airlines as it seeks to deliver the takeovers and joint ventures promised to investors.

Shares in Flybe - which were already buoyed by the positive underlying trend in its maiden annual results on Thursday, despite a 4.3m loss - climbed higher on the takeover news.