Flybe seals £323m funding for jets

REGIONAL airline Flybe yesterday sealed a $500 million (£323m) deal with a Brazilian bank to fund the purchase of 20 aircraft from a South American manufacturer.

The carrier, run by Scots-born executive chairman Jim French, will take delivery of the Embraer jets between now and July 2014.

Brazilian export development bank, BNDES, is lending the airline 85 per cent of the purchase price “at a margin of less than 200 basis points”.

French said: “The BNDES financing secures all our planned aircraft financing requirements through to July 2014 and is an important milestone for Flybe, sending out a very clear message that our business is in robust financial health.

“There will not be many European airlines signing this kind of a deal and I think it speaks volumes about Flybe’s strong financial position.”

The airline placed an order for 35 Embraer planes at last year’s Farnborough air show, including the first 20 aircraft covered by the BNDES deal. It has an option over a further 105.

The second batch of 15 planes will be delivered before October 2016. Flybe plans to use 29 of the jets to replace its existing aircraft, with the remaining six earmarked for the airline’s expansion plans.

The deal comes just weeks after results from Flybe showed the airline grew its pre-tax profits by 74 per cent to £14.3m in the six months to 30 September.