Flybe, which reported a £4.3m loss in its maiden annual results on Thursday, has agreed to buy Finnish Commuter Airlines (FCA), in partnership with Finnair, Finland’s flag carrier.
Flybe will take a 60 per cent stake in the joint venture, to be known as Flybe Nordic, while Finnair will hold the remaining 40 per cent stake. FCA is Finland’s largest domestic airline by operations, flying around 900,000 passengers per year in the Finnish domestic, Nordic and Baltic regional markets.
It currently has 15 aircraft and an annual turnover of approximately £81m.
Flybe has seen its shares fall by around 37 per cent since its flotation last December – partly due to a lack of acquisitions.
The airline has said it is in talks with an array of European airlines as it looks to deliver acquisitions and joint ventures promised to investors.
The Flybe Nordic joint venture will undertake a major marketing campaign to promote the Flybe brand to business and leisure customers in Finland.
Jim French, chairman and chief executive of Flybe, said: “Partnerships and acquisitions are at the core of our European growth strategy, which is to export our strong and proven UK business model to become Europe’s leading and most profitable regional airline.”
Flybe, which flies from airports including Leeds Bradford, Humberside, Doncaster, Cardiff, Edinburgh and East Midlands, said passenger numbers were flat at 7.2 million after the year to March 31 was disrupted by Iceland’s volcanic ash cloud and Arctic weather.
It made a bottom-line loss of £4.3m in the year, compared to a profit of £24.6m the previous year, as it was also hit by losses on hedges for fuel and exchange rates and the cost of its flotation in December.
In the final quarter of its financial year it reported a slump in demand from leisure passengers as a result of falling consumer confidence although travel by business customers held up well.
In its results, it said there had been an “encouraging” lift in trading in recent weeks, with forward ticket sales up 8.4 per cent.
The airline, which plans to expand into new European markets in the near future, expects to make pre-tax profits of about £22m in the current financial year.