Skift Take

Airlines are coming up with more creative business partnerships than ever before as the market becomes more crowded and profit margins ever slimmer.

Flybe Group Plc Chief Executive Officer Saad Hammad said the U.K. company is in talks with European airlines including a number of major operators about taking over currently unprofitable short-haul routes.

Flybe, based in Exeter, England, is exploring options for “white label” deals in which it performs regional services on behalf of bigger carriers, allowing them to focus on more lucrative routes requiring larger planes, Hammad said today.

“We’re talking about some big carriers and some smaller ones,” he said in an interview after Flybe’s first scheduled flights to London City airport from seven U.K. and Irish cities. “Some will take longer than others before they cross the Rubicon because they’re still owned by governments.”

Hammad, a former EasyJet Plc executive who joined Flybe in 2013, has cut losses by ditching predecessor Jim French’s plan to switch to a largely jet-powered fleet and capture swathes of the European regional market. He’s focused instead on cheaper- to-run turboprops planes, targeting more modest growth rates while exploring options for third-party flights.

Flybe’s main white-label deal at present is with Finnair Oyj. The U.K. carrier also has joint ventures with Belgium’s Brussels Airlines and Helvetic Airlines of Switzerland.

Hammad said Flybe has room for growth even after canceling French’s orders for 20 Embraer SA E175 jets and defering four others until 2018. While 24 Bombardier Inc. Q400s to be subleased from Republic Airways Holdings Inc. will be used mainly to replace 21 older examples, the airline could source extra aircraft as necessary, he said.

To contact the editor responsible for this story: Christopher Jasper at [email protected]

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Tags: flybe

Photo credit: A Flybe Embraer jet. Aero Icarus / Flickr

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