Flybe’s expansion gathers pace with Finnair routes

Flybe, the regional airline, is to take on a third of the European routes run by loss-making Finnish flag carrier Finnair.

The two firms, which launched a joint venture last year, said yesterday that Finnair would transfer 12 Embraer aircraft, along with some 200 cabin crew, to Flybe.

The UK carrier will take over the operations in October but has yet to disclose which routes will be affected.

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Flybe, which is run by Scots-born boss Jim French, flies from airports including Edinburgh, Bristol, Cardiff, Doncaster and East Midlands.

French, who holds the posts of both chairman and chief executive, said the agreement marked “another major step” in the development of the Flybe Nordic joint venture.

“This extension of our existing contract flying operations for Finnair is a key part of Flybe Nordic’s strategy, adding substantial scale whilst balancing Flybe’s overall risk,” he said.

Mike Rutter, managing director of Flybe Europe, added: “Flybe took the decision in 2011 to expand its successful regional airline business model into the Nordic and Baltic regions with the objective of becoming the largest and most successful regional airline in those areas.

“In the ten months since its foundation, Flybe Nordic has expanded its operations from Finland to Denmark, Estonia, Norway and Sweden.”

Exeter-based Flybe is due to announce its full-year results next month. The City has been forecasting a small loss for the 12 months to 31 March, although in a trading update last month the airline noted that the final quarter of the period had been in line with its hopes.

It is working on plans to increase revenues per seat, reduce costs and better match capacity to demand.

Finnair has been looking to overhaul its business in Europe, where it faces fierce competition from no-frills airlines. The company wants to focus instead on profitable routes to Asian destinations such as China, Japan and Singapore.

Mika Vehvilainen, Finnair’s chief executive, said: “This move is a part of our strategy to restore profitability.

“We believe that, from the customer point view, the change will be virtually unnoticed as they will maintain the benefits of our extensive network in Europe and opportunity to exploit our fast Asian routes.”

He also said the group would aim to boost the profitability of the remaining two-thirds of its European flights through more deals or cost cuts.

Flybe Nordic – owned 60 per cent by Flybe and 40 per cent by Finnair – agreed last July to buy Finnish Commuter Airlines for €25 million (£20.5m).

Finnair, which is 55.8 per cent owned by the Finnish government, has faced an uproar this year over executives’ pay, particularly over bonuses for top officials when the firm was cutting jobs. The Helsinki government has pushed the airline to overhaul its board after the executive pay row.