Flybe Group PLC Flybe announces completion of Project Blackbird (1255E)

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RNS Number : 1255E

Flybe Group PLC

02 November 2015

Exeter, UK

2 November 2015

Flybe Group plc ('Flybe' or 'the Group')

FLYBE ANNOUNCES THE COMPLETION OF PROJECT BLACKBIRD, WITH THE REDEPLOYMENT OF ALL REMAINING SURPLUS JET AIRCRAFT

Flybe, Europe's largest regional airline, is pleased to announce that it has resolved its last major legacy issue through the redeployment of all its remaining surplus Embraer E195 aircraft, thereby bringing Project Blackbird to a close.

Of the original fleet of fourteen legacy E195s, Flybe had previously announced solutions for eight:

   --     Five were handed back to lessors; 

-- As announced on 5 March 2015, two are based at Cardiff Airport under a long-term agreement signed with the airport operators, Cardiff Airport Limited, flying to a mix of destinations across UK and Mainland Europe;

-- As announced on 8 October 2015, one will be based at Exeter, under a long term agreement with Rigby Group-owned Regional & City Airports, to serve Exeter and Norwich Airports with eight routes to five destinations in Mainland Europe starting in March 2016.

Today, Flybe is announcing the redeployment of the remaining six E195s to start from March 2016:

-- One aircraft will replace a Q400 aircraft at Newquay under a redefined Public Service Obligation (PSO) agreement with Cornwall Council to satisfy increased demand on the Newquay-London Gatwick route already operated by Flybe

-- Two will be based at Doncaster Sheffield Airport, flying to key cities and regional centres across Mainland Europe, under a long-term agreement with the Airport to provide much needed regional connectivity to the people of South Yorkshire and the surrounding area

-- Three aircraft will operate at Birmingham and Manchester Airports. Two of these will provide additional capacity on high load factor routes and the third E195 will provide Ejet standby cover across Flybe's network

Completion of Project Blackbird delivers a GBP40m mitigation versus Flybe's previously indicated obligation of GBP80m over the remaining term of the aircraft leases. We currently anticipate that the financial cost of resolving the remaining E195s will be GBP20m this year, reducing to around GBP10m next year, and then to GBP6m the year after and GBP4m in the following year.

Saad Hammad, Chief Executive Officer, said:

"This announcement marks the definitive completion of Project Blackbird. The arrangements announced today are a superb result for all Flybe stakeholders. They avoid the need for any upfront payment, enhance UK regional connectivity and have mitigated exposures to Flybe. With the last of our major legacy issues behind us, we can now focus all our attention on becoming a world-class regional airline."

Steve Gill, Managing Director of Doncaster Sheffield Airport, said:

"This is a transformational announcement which brings massively enhanced connectivity to the Sheffield City Region's airport. Doncaster Sheffield Airport is already the fastest growing airport outside of London. These two new aircraft will make available half a million new flight seats and is expected to grow our passenger traffic by around 30%. This news comes just a few months before the new motorway link road opens which will enhance the airports catchment area with journey times to the airport reducing by 20 minutes."

Adam Paynter, Cornwall Council's Cabinet Member for Resources, said:

"The success of the PSO service has meant that passengers have sometimes struggled to get tickets for some flights. We know that this service is hugely important for businesses in Cornwall, with a large number of people regularly using the route to travel to and from London. I am sure that the business community will welcome the increased number of seats and reduced journey times provided by the new jet aircraft."

Flybe will announce its half year results on 11 November 2015

ENDS

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November 02, 2015 02:00 ET (07:00 GMT)