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Flybe Seals Funding for Jets

Flybe PlaneFlybe yesterday managed to seal a $500 million deal with one of Brazil’s main banks that will fund the purchase of aircraft from a manufacturer based in South America. The regional carrier, run by its Scots-born executive chairman, Mr Jim French, is to take delivery of 20 Embraer jets that are to arrive between now and mid-2014. BNDES, a Brazilian export development bank, will lend the carrier 85 per cent of its purchase price.

French commented that BNDES’ financing secures the planned aircraft that the company requires and marks an important milestone that sounds out a clear message on its robust financial health to all rivals. It was added that there won’t be many airlines in Europe signing these kinds of deals anytime soon and that French believes such an announcement speaks volumes about the strong financial position that Flybe stands in.

The announcement of this week’s deal comes just a matter of weeks after Flybe showed that its pre-tax profits rapidly grew by almost 75 per cent to around £14.3m over the six months that lead up to 30 September. The carrier placed an order for at least 35 Embraer planes during last year’s air show at Farnborough. The first 20 aircraft will be covered by the mentioned BNDES deal and there is an option for more than a further 105. A second batch of 15 jets will be delivered by October 2016 and Flybe plans to make use of 29 of its jets to replace the existing aircraft it has, with the remaining six meant for the airline’s expansion plans.

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