Finnair’s codeshare network is soon to be significantly expanded in the Nordic region with as cooperation with new partner Flybe gets under way at the end of October when the new winter timetable gets going. The link-up with Flybe ensures continuity of an established network within Finland and to neighbouring countries as well as strengthening the network with a cluster of new routes. This network will contribute to feeder traffic for Finnair’s Fastest to Asia strategy while cementing Finnair’s status as leading airline in Northern Europe.

Flybe has announced the route plans of the recently founded Flybe Nordic airline, jointly owned by Flybe and Finnair.

Flybe Nordic, which uses the Flybe brand and is managed operationally by Flybe, will fly routes formerly operated by Finncomm as well as many new routes, thereby strengthening its position in the Nordic countries and the Baltic area. The new routes will also complement feeder traffic to Finnair’s international connections. The deal by which Flybe Nordic acquired Finnish Commuter Airlines was finalised earlier in August. Flybe owns 60% of Flybe Nordic and Finnair 40%.

By also expanding into Sweden, Denmark, Estonia and Latvia, the new airline will differ substantially to those regional airlines previously operating in these marketplaces. Firstly, it plans to introduce Flybe’s already successful quality low-fare concept/product to the Finnish, Nordic and Baltic regions, allowing millions of business and leisure passengers the opportunity to travel at affordable prices. In addition, the company will benefit from Finnair’s excellent connections to Europe and Asia as well as its local expertise. In short, Flybe and Finnair want to create more Flying Finns by offering an affordable aviation product that understands the needs of the Finnish nation.

Flybe comes with a distinguished track record of high profile international trade and consumer awards included amongst which are those that recognise its success and commitment to delivering a quality customer service-oriented product. This includes an Economy Plus option for the business traveller and an added bonus of knowing they are flying with the airline that initiated the world’s first eco-labelling scheme for the aviation industry.

Secondly, it will fly non-stop and directly between regional airports enabling customers to save time. This system of ‘point-to-point’ flying will open up new destinations and it will complement Finnair's international network operations. The new airline is designed to support and stimulate regional Nordic economies in the way that Flybe has already so successfully done around the United Kingdom and Europe. By introducing new regional routes, new flights and new timetables, the airline aims to invigorate previously unstimulated markets that until now have not been serviced by other carriers.

The new routes, which will also be included in Finnair’s flight schedules, will be flown as code-share flights. Finnair Plus customers can accumulate frequent-flyer points on the Flybe Nordic flights.

The new destination pairings widening the Finnair network as of October 30, when the winter timetable starts, are as follows:

In Finland, Helsinki–Kemi/Tornio, Helsinki–Kokkola/Pietarsaari, Helsinki–Pori, Helsinki–Savonlinna, Helsinki–Seinäjoki, Helsinki–Varkaus, Helsinki–Enontekiö, Seinäjoki–Kittilä, Tampere–Kittilä, Turku–Kittilä, Tampere–Kuusamo, Helsinki–Maarianhamina.

To Sweden, Helsinki–Norrköping, Helsinki–Skelleftea, Kokkola/Pietarsaari–Skelleftea, Helsinki–Uumaja.

In Estonia, Helsinki–Tartu, Tallinn–Vaasa,Tallinn–Oulu, Tallinn–Turku, Tallinn–Tampere.

Other routes are Tallinn-Stockholm (Bromma), Helsinki Gdansk and Helsinki Trondheim.

Flybe in a nutshell:

• Europe’s biggest regional airline flying 188 routes in 13 countries, operating from 75 airports
  
• Awarded in 2011 with the Best Short-Haul Airline accolade by Best Business Travel Awards
  
• Placed an order for 140 Embraer 150 and E-family aircraft in 2010

Finnair and Flybe to set up Flybe Nordic and acquire Finnish Commuter Airlines

Finnair and the largest European regional airline Flybe of UK announced today that the companies will jointly acquire Finnish Commuter Airlines (FCA), a Finnish regional carrier owned by Finncomm Oy. The companies will create a new joint venture called Flybe Nordic AB, to be split 60 % Flybe and 40 % Finnair. Flybe Nordic AB’s board will comprise three representatives from Flybe, and two from Finnair.

Flybe Nordic AB will acquire FCA for a total consideration of 25 million euro plus net cash in the acquired business at completion. Under the terms of the joint venture, Flybe will pay 12 million euro cash and Finnair 13 million euro cash. Completion is expected to take place within four weeks from signing. FCA will continue operating FCA's existing domestic routes under the Flybe brand. Flybe plans to take over the day-to-day operation and management of the airline from August 1, 2011.

"The joint venture with Flybe and the acquisition of FCA are 100% in line with the Finnair strategy. Our target is to partner with the industry best to create added value to our customers and shareholders. FCA's current network is a tremendous asset when we continue to further develop our regional network. We believe that Flybe's point-to-point experience and their unique business model will complement Finnair's international network competencies in an optimal manner and enables us to build a true Nordic regional champion", says Finnair CEO Mika Vehviläinen.

"We are excited about the co-operation with Flybe", notes Vehviläinen. "Finnair and Flybe have complementing competencies and we believe that Flybe's experience in regional flying combined with Finnair's local knowledge and international operations will be a winning combination. We look forward working together and building a new strong player in the Nordic and Baltic markets."

Finnair to purchase FCA fleet and lease it on market terms

The FCA fleet will transfer to Finnair: Finnair will buy the FCA fleet of nine ATR 72 aircraft at market price and lease them to FCA, owned by Flybe Nordic. In addition, Finnair has committed to purchase the three Finncomm ordered, high-demand ATR 72s, to be delivered autumn 2011 and autumn 2012. The aircraft will be leased directly to FCA at a market price.

The remaining four ATR 42 aircraft owned by Finncomm Oy will be leased to FCA for certain predefined periods. This FCA fleet of modern and cost effective turbo-prop planes allows FCA operate value-adding regional flights in the target markets. In addition, FCA will continue leasing of two Finnair owned E170 aircraft.

Finnair's investment in these nine ATR 72's will be approximately 104 million euro including 70 million euro debt liabilities for the ATR fleet.

"There's a huge demand and undersupply in the industry for the ATR aircrafts. Due to the fuel efficiency they are optimal for regional flying. For Finnair this is a great opportunity to strengthen our fleet and as such it is a smart investment and ensures that our new venture will have the required capacity from day one", continues Vehviläinen.

Finnair has partnered with FCA for over 10 years to provide point to point and feeder traffic services in various Finnish and Baltic markets. FCA is Finland’s largest domestic airline by operations, currently flying approximately 900,000 passengers annually. It currently has 15 regional aircraft and an annual turnover of approximately €90 million. The company employs approximately 400 people.

FCA will continue to operate its current routes under Flybe brand but the intention of Finnair and Flybe is to develop the joint venture to become the leading regional airline for the Nordic and Baltic countries in the coming years.

The acquisition is subject to approval of the relevant competition authorities.

Finnair press release, 1/07/2011