Eastern aims for expansion after deal for rival

AVIATION entrepreneurs Bryan Huxford and Richard Lake are to grow their Eastern Airways business with the acquisition of Air Southwest, a Plymouth-based airline.

Mr Huxford, the 71-year-old chairman and joint owner, would not disclose the value of the deal, which adds new routes and five aircraft, but confirmed it was a "substantial sum".

He and managing director Mr Lake, 49, have joint shareholdings in Eastern Airways, the UK's second largest regional airline with key hubs in Aberdeen, Newcastle and Southampton.

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The airline currently has 30 aircraft and a network of scheduled routes serving business communities from 21 airports in the UK, Ireland, Norway and France.

It employs 525 people and is based at Humberside International Airport. Turnover last year was around 85m and it made a profit of around 3m, said Mr Huxford.

Following the acquisition, which is subject to regulatory approval, Mr Huxford and Mr Lake plan to expand Eastern Airways' network into the South West of England.

Air Southwest, a subsidiary of FTSE 350 listed Sutton Harbour Group, operates from 12 airports with a fleet of five aircraft and employs 135 staff.

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Accounts for the year ending March 2009 show it made a pre-tax loss of 337,000 on a turnover of 21m.

Richard Lake, managing director of Eastern Airways, said: "As market leaders in our respective catchments this deal makes perfect sense for Eastern Airways and gives us an even greater reach across the UK.

"Air Southwest is well regarded by its customers and we want to ensure we retain that loyalty by continuing to offer excellent service and value for money.

"The integration of the two airlines also enables greater operational flexibility and efficiency as we can look into synergies by bringing both networks and fleets closer together."

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The two airlines formed a strategic partnership earlier this year, which allowed Air Southwest to broaden its sales channels.

Nigel Godefroy, chief executive of Sutton Harbour Group, said: "Our goal has been to reach an agreement which puts Air Southwest into good hands and I am confident that this deal with Eastern Airways does just that. Being part of a larger airline will bring stability to Air Southwest."

Mr Huxford founded his first airline, Eastern Airways, in 1979. He sold the business to Genair in 1982 and later went into buying and selling aviation equip- ment.

In 1997, he started another airline, using the Eastern Airways name.

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The operator established a reputation as a business carrier and has become a big contractor to the offshore oil industry.

Mr Huxford, a former director of Grimsby Town Football Club, said: "Passengers are very discerning and if they get what they want they will continue to do business with us."

Eastern Airways operates 40,000 flights a year, including services from Leeds Bradford International Airport (LBIA).

Meanwhile, LBIA announced yesterday it has become the fastest growing top 15 airport in the UK, according to the latest report published by the Civil Aviation Authority.

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The figures show 11 per cent year on year growth in July 2010 when the airport handled a total of 352,175 passengers compared to 318,549 passengers during the same month in 2009.

Tony Hallwood, commercial director, said: "Our growth to 76 destinations in 2010 and continued expansion by our airline partners means that we can look forward to 2011 with confidence."

Speaking from an industry conference in Canada, he said his top three priorities are to establish new routes to Germany, Yorkshire's biggest trading partner, a daily service to Scandinavia and transatlantic flights to the United States.

Continental Europe still on radar for Flybe

Regional airline Flybe yesterday said it will continue its expansion into continental Europe after becoming one of only three major European airlines to report profits throughout the recession.

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The privately-owned carrier, which recently signed a codesharing agreement with Air France, said it is looking at potential acquisitions of regional airlines in Europe after weathering the economic storm.

But the airline said it would maintain its regional ethos, with flight times continuing to average less than an hour, on board planes with just 85 seats.

Flybe, which is also in flight share discussions with Scandinavian airline Finnair, said it had put in an order to purchase up to 140 new aircraft, which would replace some of its current 68-strong fleet.

The Exeter-based carrier posted pre-tax profits before exceptionals of 6.8m in the year to March 31, down from 12.8m the previous financial year, after a marginal decline in turnover to 570.5m from 572.4m.

It operates services from Leeds Bradford International to London Gatwick, Aberdeen, Belfast City, Exeter and Southampton.