Budget airline Flybe announced yesterday it had cancelled most of a $1.3bn (£798m) jet order, choosing instead to lease propeller-powered planes as it continues its restructuring to target regional routes.
Exeter-based Flybe revealed it would cancel the remaining 20 planes from its $1.3bn order for 35 of the 88-seat E175 jets that it had agreed with Brazilian aerospace firm Embraer at Farnborough airshow in 2010.
Instead, Flybe has agreed with US regional airline Republic to lease 24 Bombardier 71-seat Q400 propeller-driven twin-engine turboprop aircraft, with delivery over a two-year period starting March 2015.
Flybe’s new order to lease 24 Bombardier Q400 planes would make it the largest operator of the aircraft in the world.
The move represents part of a strategic shift to restructure the airline to return to profit by focusing on regional routes, led by chief executive Saad Hammad, who took up the post last August.
“We are committed to flying the right aircraft on the right routes,” Hammad said, “and our core UK branded fleet is now right-sized to our capacity growth and aircraft renewal plans at a net cost broadly in line with our expectations.”
Flybe’s restructuring includes 1,100 jobs losses, but it did bounce back into profit in its last financial year ended 31 March 2014, with a pre-tax profit of £8.1m, up from a £41.1m loss the year before.
Flybe shares, which have risen by around 95 per cent since Hamaad’s appointment, edged up yesterday by 0.87 per cent to finish on 116p.