Flybe to return 10 aircraft to lessors

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Flybe Group will return a total of 10 aircraft to lessors in its current fiscal year as it continues efforts to match capacity with demand, particularly in its core UK market.

Five 118-seat Embraer 195s operated by UK subsidiary Flybe will have been handed back by 31 March 2015, along with five 78-seat Bombardier Q400s.

The group says two E195s are contracted to return in 2014/15, and an agreement has been reached with another lessor for the early hand-back of a further three E195s. These were originally scheduled for return in 2015/16.

At 10 June, another 10 E195s were grounded. The group says four units are currently being deployed, three for scheduled flying and one in short-term white-label operations for Aurigny. For the remaining six E195s, Flybe is in active discussions with a number of airlines to deploy them under white-label or sub-leased operations.

The five Q400s scheduled to be handed back to lessors in the first half of the current fiscal year are being purchased post-year-end from the lessors in order to provide capacity for expansion at London City commencing in late October, says Flybe.

In the year ended 31 March 2014, Flybe took delivery of a further two E175s, taking the total delivered to 11 units. No further aircraft are contracted for delivery until October 2015, says Flybe.

During the year, the group sold two Q400s, gaining £12.3 million ($20.6 million) in proceeds from the transaction and recording a “modest” book profit.

The group also recorded a figure of £11.8 million for pre-delivery deposits returned to Flybe during the year following negotiations with Embraer to reschedule deliveries of new aircraft. Repayments on loans exceeded proceeds from a new loan related to the acquisition of an E175.

At 31 March, Flybe’s UK arm operated 14 E195s, 11 E175s and 45 Q400s.

Its associated company Flybe Finland operated two E170s, 12 E190s, two ATR 42s and 12 ATR 72s.