Flybe Group PLC Inks Deal With London City Airport

Shares in Flybe (LSE: FLYB) increased 4% after the low-cost airline revealed it has signed a five-year agreement  to start operating international and domestic flights from London City Airport. This marks a return to London for Flybe after selling 25 takeoff and landing slots at London Gatwick a year ago.

FlybeFlybe expects to carry up to 500,000 passengers annually, and will offer flights four times daily to Edinburgh as well as less frequent flights to Belfast, Inverness and Exeter. Flybe claims that these routes will “boost connectivity” to London from elsewhere in the UK, while domestic services will be subsidised by flights to selected leisure destinations in France and Spain.

Flybe only returned to profit in the six months to September and turned to shareholders for £150m to help its recovery plan.

The chief executive, Saad Hammad, commented:

“Today’s announcement is a significant landmark in the re-birth of Flybe.  We are delighted to re-enter the London market at London’s most convenient airport following a rigorous profitability analysis utilising our strict route assessment model.”

“We look forward to a long and successful partnership.”

Flybe will publish its 2014 results on 11 June and the share price has enjoyed exceptional gains in the last 12 months, increasing threefold. Of course, the decision to ‘buy’ — based on today’s announcement and the wider prospects for the air travel sector — remains your decision.

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Mark does not own shares in Flybe.