Finnair and Flybe to part ways
#1
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Finnair and Flybe to part ways
Flybe is to give up their stake in flybe nordic. Finnair to see massive losses.
Flybe and Finnair have agreed to restructure the ownership of their jointly owned Flybe Nordic venture, and Flybe has agreed to sell the shares that it holds in Flybe Nordic to a potential new majority shareholder or to Finnair for the price of one euro. The sale of the shares is conditional only upon approval being received from the competition authorities.
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“The financial performance of our joint venture has not developed according to the expectations of its shareholders. We haven’t been able to arrive at a common view to resolve the profitability issues, and therefore the companies have agreed to discontinue the cooperation. Finnair aims to find a new majority shareholder and a business model that would enable the development of regional flying in a financially sustainable way,” says Pekka Vauramo, Finnair CEO.
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Finnair’s balance sheet includes a 9.9 million euro subordinated loan issued to Flybe Finland in 2011. Finnair has written down the value of its Flybe Nordic AB shares following the realized losses of Flybe Finland.
Finnair also has advance payment and other operational receivables from Flybe Finland. Due to Flybe Finland’s ownership change and the need to restructure its operations, it is possible that a part of these receivables cannot be collected. Finnair is also considering giving working capital financing to Flybe Finland. Finnair estimates that the resulting financial impacts will not exceed -20 million euros. The exact overall impact will be communicated when the ownership structure is defined.
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“The financial performance of our joint venture has not developed according to the expectations of its shareholders. We haven’t been able to arrive at a common view to resolve the profitability issues, and therefore the companies have agreed to discontinue the cooperation. Finnair aims to find a new majority shareholder and a business model that would enable the development of regional flying in a financially sustainable way,” says Pekka Vauramo, Finnair CEO.
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Finnair’s balance sheet includes a 9.9 million euro subordinated loan issued to Flybe Finland in 2011. Finnair has written down the value of its Flybe Nordic AB shares following the realized losses of Flybe Finland.
Finnair also has advance payment and other operational receivables from Flybe Finland. Due to Flybe Finland’s ownership change and the need to restructure its operations, it is possible that a part of these receivables cannot be collected. Finnair is also considering giving working capital financing to Flybe Finland. Finnair estimates that the resulting financial impacts will not exceed -20 million euros. The exact overall impact will be communicated when the ownership structure is defined.
#2
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Read the press release this morning. Holy cow, that is going to hit AY hard. Essentially their entire strategy of outsourcing everything other than the Airbus operation is now at stake.
#6
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I am quite surprised, was under the impression unit costs had fallen and they were heading the right way. Traffic performance numbers were up.
What will happen to the fleet renewal for shorhaul now? If flybe unit cost wasn't low enough, how can AY finance new metal?
And the growth strategy on longhaul? It is dependent on a growth in feeder traffic.
#7
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if Finnair now will take over Flybe routes, at least I hope ex-TLL redemptions on AA and BA will be available, right now TLL does not exist for other Oneworld carriers, but AY.
#8
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I do not think AY will take over any routes.
If, and that we don't know, Flybe does not find a buyer for their 60%, AY will buy it for 1€. It will still be "Flybe Nordic AB" and its subsidiary "Flybe finland" operating as far as I can understand.
If, and that we don't know, Flybe does not find a buyer for their 60%, AY will buy it for 1€. It will still be "Flybe Nordic AB" and its subsidiary "Flybe finland" operating as far as I can understand.
Last edited by intuition; Nov 12, 2014 at 10:55 am
#15
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I didn't understand why they insisted on operating as an independent airline with no alliance benefits rather than as an integrated express operator like American Eagle. For me, they were as unattractive as any other non-allied airline, and I didn't fly with them once.