Finnair (OMXH: FIA1S) and English low-cost airliner Flybe Group PLC are taking their partnership announced last year one step further as the joint venture of the two companies Flybe Nordic will take on 12 new planes from Finnair under a contract flying arrangement, taking Flybe Nordic’s fleet up to 28. The MoU states that 12 Embraer E190 regional jets will be flown on a number of European short haul routes at cost effective rates. This is about one third of Finnair’s currently loss making European flights.
Flybe is aiming to become the largest and most successful regional airliner in Nordic and Baltic regions. Given that Skyways just declared bankruptcy today, there may be a further opening here. Flybe Nordic has as an example a growing presence in Stockholm Bromma airport. Finnair feels customers will barely notice a change and the company has been very happy with the quality of Flybe’s operations. Earlier today there was speculation in the local newspaper Iltasanomat, that Finnair might be allying with Norwegian Air Shuttle ASA (OSE: NAS). Finnair’s CEO Mika Vehviläinen flat out denied this after the Flybe arrangement was made public.
The arrangement would mean that a large number of Finnair personnel including over 100 pilots and nearly as many cabin crew personnel will move to Flybe Nordic unless otherwise agreed. It might also mean several hundred redundancies Union representatives have already expressed confusion over the matter and opposition from them is to be expected. Finnair's relationship with the relevant unions has already soured following the publication of ample compensations given to upper management in years past and despite all the news that the company nearing crisis point at this rate, similar level of urgency is not yet felt on the union front.
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