Oneworld carrier Finnair is to transfer 12 Embraer 190s to UK regional operator Flybe, outsourcing further its short-haul operations as part of a broad effort to cut costs.

Their joint venture Flybe Nordic will take over flying the Embraers in October 2012 under a memorandum of understanding signed by the two sides.

This agreement will increase the number of aircraft operated by Flybe Nordic to 28. Twenty of these will be flying for Finnair services.

The pact encompasses about a third of Finnair's European flights.

Flybe Nordic - formed by the two carriers' acquisition of Finnish Commuter Airlines - has been flying eight aircraft on Finnair's behalf since August last year.

"This move is a logical extension of our co-operation with Flybe," says Finnair chief Mika Vehvilainen, adding that the UK airline "offers us a cost-efficient platform for operating this traffic".

He adds: "We believe that, from the customer point view, the change will be virtually unnoticed."

Pilots and cabin crew will transfer with the business, unless otherwise agreed during personnel negotiations, Finnair adds.

"If the savings agreement under preparation is completed, pilots transferring to operate Flybe flights would return to Finnair, in stages, to be trained as Airbus pilots for Finnair's growing Asian traffic," it states.

Flybe Group chief Jim French says the agreement adds "substantial scale" to the Nordic operation while "balancing" overall risk for the airline, with a quarter of the group's fleet operating under contract services.

"We believe there are many more similar opportunities to develop this side of the business," he adds.

Source: Air Transport Intelligence news