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24 November 2011

Flybe aircraft finance deal

Flybe, Europe's largest regional airline, is pleased to announce that it has signed a committed financing of approximately $500 million for 20 new Embraer E175 regional jet aircraft scheduled for delivery between November 2011 and July 2014. The loan facility was signed with BNDES, the Brazilian Export Development Bank, and provides debt financing for 85% of the net aircraft price at a margin of less than 200 basis points.

 

At the Farnborough Air Show in July 2010, Flybe signed a major aircraft deal with Embraer for up to 140 of their E-series aircraft, comprising 35 firm orders for Embraer E175s, with options and purchase rights for a further 105 E-series aircraft.

The scheduled delivery dates of the 35 firm aircraft are between November 2011 and October 2016 – 29 of these aircraft will substitute existing aircraft as they exit Flybe’s fleet over that period, and the remaining six are earmarked for growth. The financing announced today covers the first 20 of the 35 aircraft. As of today’s date, no options or purchase rights have been exercised.
 
Jim French CBE, Flybe’s Chairman and Chief Executive Officer commented:
 
“The BNDES financing announced today secures all our planned aircraft financing requirements through to July 2014 and is an important milestone for Flybe, sending out a very clear message that our business is in robust financial health.

“In the current challenging economic environment, I believe this very significant financing is a great testament to Flybe's recognised strength within the aviation finance community.  This news follows on the back of our interim results for 2011/12, which showed a 74% increase in profits before tax to £14.3 million against a backdrop of difficult trading conditions in the UK. 

“The Embraer E175 delivers the right economic and environmental peformance for the sector lengths we are most interested in exploiting in Europe. We have enjoyed an excellent relationship with Embraer since we became the world’s launch customer for the Embraer E195 aircraft, which has been a superb addition to our fleet with its outstanding reliability and performance.
 
Mr. French concluded: “This agreement is a significant vote of confidence in Flybe and I would like to thank our partners Embraer and BNDES for making this deal possible.“