LONDON (Alliance News) - European regional airline Flybe Group PLC on Thursday said it has fulfilled all conditions relating to its contract with aircraft leasing company Nordic Aviation Capital.
Under the contract, which was entered into last month, it was agreed that Nordic Aviation would cancel obligations to lease nine used Bombardier Q400 turbopop aircraft to Flybe, while Flybe would take full ownership of ten Q400 aircraft which were already under contract to lease.
The contract had two conditions which were unsatisfied at the time, which Flybe said have now been fulfilled.
Flybe said the agreement has saved it from a total of GBP38 million lease liabilities for the nine aircraft over the next six years, and GBP49 million in lease payments for the ten aircraft over the next five years as well as end-of-lease restitution liabilities estimated at GBP5 million.
Ownership of the ten aircraft will cost GBP86 million in cash, GBP60 million of which will be funded through a loan. The purchased aircraft have an expected residual value of GBP16 million.
"This reordering of contractual arrangements moderates our seat capacity growth and continues Flybe's strategy of rebalancing its fleet structure towards a more even split between ownership and operating leases. It also reduces our total full-life financial liabilities on our aircraft fleet. This transaction together with the earlier three aircraft equity investment announced in April 2016, reduces the proportion of aircraft on operating leases in our UK fleet from 80% to 66% by March 31, 2017," Chief Executive Saad Hammad said in a statement.
Shares in Flybe were trading down 0.3% at 39.90 pence on Thursday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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