Flybe agree to buy Finnish regional carrier in €25m

Flybe, Europe's largest regional airline, and Finnair have together agreed to buy Finland's biggest domestic carrier Finnish Commuter Airlines (FCA) for €25 million (Dh132.5 million) to expand in the Baltic market. Flybe, which has also agreed to buy 46 per cent of Finnish Aircraft Maintenance, will pay €12 million in the joint venture — to be known as Flybe Nordic — while Finland's flag carrier will pay €13 million. The British carrier, which raised around £60 million through a float in London late last year, said its total investment would be €23.6 million including net cash and loan repayments. "We're going after the whole Baltic regional market and want to replicate in the Baltic regional market what we did in the UK —linking secondary and primary cities," Flybe Chief Executive Jim French said. "Part of the reason for the IPO was to raise funds to invest into Europe and in five years I see the European side of the business being bigger than the UK business." Article continues below Full-year loss Flybe, which operates 69 aircraft from 14 UK airport bases, posted a full-year loss of £4.3 million on Thursday, hit by the impact of last year's Icelandic volcanic eruption, severe winter weather and rising fuel costs. "We think boosting the Finnair Helsinki hub is a good strategic move ... the challenge for Flybe will be keeping out of the way of the Nordic low-cost challenger Norwegian," said Royal Bank of Scotland analyst Andrew Lobbenberg. Flybe shares in London were up 7 per cent by 0835 GMT yesterday, while Finnair shares in Helsinki were 3 per cent higher. In the deal Finnair will buy FCA's aircraft at market price and lease them back to the venture. Its investment will be around €104 million including the fleet's debt liabilities of €70 million. Flybe's French said his ultimate aim is to join a few satellites in continental Europe and link all the dots so Flybe goes right across Europe as Ryanair and easyJet have.