Contract Flying MoU with Finnair

Flybe Group plc

("Flybe" or "the Group")

Contract Flying MoU with Finnair

Flybe, Europe's largest regional airline, today announces that Flybe Nordic, its joint venture with Finnair, has signed a Memorandum of Understanding with Finnair to fly 12 Embraer E190 regional jets on behalf of Finnair under a contract flying arrangement.

Under the terms of the MoU, the long term E190 contract flying operations will commence on 28 October 2012. The aircraft will fly for Finnair on a number of European short haul routes, taking advantage of Flybe Nordic's competitive cost base.

With this further agreement the number of aircraft flown by Flybe Nordic will reach 28, double the number flown when the business commenced operations in August 2011, of which 20 will be flying under contract for Finnair.

Mike Rutter, Managing Director of Flybe Europe, commented:

"Flybe took the decision in 2011 to expand its successful regional airline business model into the Nordic and Baltic regions with the objective of becoming the largest and most successful regional airline in those areas.

"In the ten months since its foundation, Flybe Nordic has expanded its operations from Finland to Denmark, Estonia, Norway and Sweden - in the latter country establishing a growing presence at Stockholm's city airport Bromma.

"We have been flying eight aircraft on a contract basis for Finnair since August 2011 and we are delighted that the quality and efficiency of our operations have persuaded Finnair to add another 12 aircraft to our partnership."

Mika Vehviläinen, Finnair CEO, commented:

"This move is a logical extension of our co-operation with Flybe. The MoU covers approximately one third of Finnair's European flights. Flybe offers us a cost efficient platform for operating this traffic and enables us to continue to offer the wide network and frequencies to both our regional customers as well as our customers flying between Europe and Finnair's Asian destinations.

"We believe that, from the customer point view, the change will be virtually unnoticed as they will maintain the benefits of our extensive network in Europe and opportunity to exploit our fast Asian routes. We look forward to this expansion of our co-operation with Flybe, which has proven its capabilities to run regional traffic efficiently."

Jim French, Chairman and CEO of Flybe Group plc, concluded:

"Today's announcement marks another major step in the successful development of the Flybe Nordic business. This extension of our existing contract flying operations for Finnair is a key part of Flybe Nordic's strategy, adding substantial scale whilst balancing Flybe Group's overall risk.

"With this deal, 25% of the fleet under Flybe Group's management will be deployed under contract flying arrangements. We believe there are many more similar opportunities to develop this side of the business."

22 May 2012

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