Flybe gears up for a stock market debut

Marion Dakers
BUDGET airline Flybe is close to announcing an initial public offering (IPO) on the London stock market, sources familiar with the matter confirmed yesterday.

Europe’s largest domestic airline by passenger numbers has hired Investec and Merrill Lynch to advise on the float, which could value the company at £200m according to a Sunday newspaper.

Flybe has toyed with the idea of a public offering for several years, but is understood to have firmed up its plans following strong results in September, when the company announced pre-tax profit of £6.8m for the year even after losing £21m in sales due to the volcanic ash cloud.

Chief executive Jim French said at the time that Flybe was eyeing acquisitions in Europe, and the firm is reportedly looking to use the proceeds from a float to buy two rivals.

Flybe is 69 per cent owned by late founder Jack Walker’s family trust, through the Jersey-based Rosedale Aviation Holdings, which will reportedly keep its stake following a float.

Employees own 16 per cent of Flybe shares, while British Airways own 15 per cent through Flybe’s purchase of budget carrier BA Connect in 2006.

The airline operates 203 routes in 13 countries, carrying 7.2m passengers in the last year alone.

It signed deals this year with Finnair, Air France and Embraer to share or take over services, as part of its expansion plans.

A spokesperson for Flybe said yesterday the company would not comment on speculation. Investec declined to comment, while Merrill Lynch could not be reached.