17th Sep 2014 08:59
LONDON (Alliance News) - Flybe Group PLC said Wednesday that it had reached agreements with Republic Airways Holdings Inc and Embraer SA over future aircraft orders, part of a move to reduce its costs and fleet as it continues to try and become sustainably profitable.
The budget carrier said the new deal will see it and Embraer terminate twenty E175 88-seat regional jets from Flybe's order backlog of 24 of the plans. Under a separate agreement between Embraer and Republic, the latter will buy 50 E175s, Flybe said.
Flybe has also agreed a deal with Republic to sublease 24 71-seat Bombardier Q400 turboprop aircraft. Deliveries of the aircraft are due to start in March 2015 and will be spread over two years.
Embraer has also agreed to defer delivery of Flybe's order of the four remaining E175s to 2018, in line with the carrier's current fleet planning needs, Flybe said.
"We are committed to flying the right aircraft on the right routes. The agreements between Flybe, Republic Airways and Embraer bring more than just an ability to keep to that commitment. With the substitution of twenty E175 future deliveries by young and attractively priced Bombardier Q400s, our core UK branded fleet is now right sized to our capacity growth and aircraft renewal plans at a net cost broadly in line with our expectations," Saad Hammad, Chief Executive of Flybe, said.
"Let us be clear, there is more to do. But these landmark agreements are a significant step towards resolving all our legacy fleet issues and enable us to implement our strategy of connecting regions more effectively," Hammad added.
Flybe shares were up 0.9% to 116 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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