FLYBE TO FLOAT TO FUND EXPANSION

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By TESTCustomwebLP TESTCustomwebLP November 15, 2010 10:14

FLYBE TO FLOAT TO FUND EXPANSION

UK domestic airline, Flybe, is reported to be gearing up to launch a stock market flotation which will value the company at £200 million. Local media report the airline will issue an intention to float by the end of this week; Merrill Lynch and Investec are advising on the deal.

The airline is reported to be planning to use the cash generated by the sale to fund its expansion plans, which could include buying Swiss regional airline Flybaboo or an as yet unconfirmed Finnish airline, if newspaper reports are to be believed.

Flybe is 70% owned by the Walker family trust, British Airways owns 15%, chief executive Jim French owns 7% of the shares, while Flybe staff own the remaining 8%.

Flybe posted pre-tax profits before exceptionals of £6.8 million on sales of £570.5 million in the year to March 31. The airline also has 35 firm initial orders of the Embraer E series aircraft for $1.3 billion with options for 65 more and purchase rights for a further 40.

With this news we have to ask what Flybe plans to be in the future. A multinational regional specialist? Maybe Flybe see this strategy as an attack on low hanging fruit. Regional carriers are usually during a downturn easy pickings for a takeover and with £200 million you are not going to get a large airline for your money. Flybe might well be hoping to join up the links between its future national regional operations so that it will be, before long, a regional airline group that spans a continent like a rail road network in the air. If nothing else, Flybe has shown us that there is money to be made from regional operations, if anyone can make it work then it will be them!

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By TESTCustomwebLP TESTCustomwebLP November 15, 2010 10:14
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