Flybe float values group at £215m

By THIS IS MONEY
Updated:

 

Regional airline Flybe took off with its stock market flotation today, valuing the group at around £215m.

Flybe plane

Super fly: Trading got off to strong start with shares debuting at 320p before easing back

The carrier, which is Britain's biggest domestic airline, priced its shares at 295p each in conditional dealings for its market debut.

But Flybe is facing the threat of industrial action from more than 700 pilots after a union accused it earlier this week of ignoring pay concerns and putting all its resources into the flotation.

Trading in Flybe got off to a strong start with shares debuting at 320p before easing back. Official trading starts next Wednesday.

Flybe is putting proceeds from the float - around £60m - towards expansion plans.

It said half will go towards a fleet of new aircraft and the remainder into supporting growth plans, such as codesharing agreements and potential takeovers.

It is offering 28% of the company to external investors in the initial public offering (IPO).

The current shareholders, which include the founding Walker family, British Airways, and chief executive Jim French, will retain stakes.

Exeter-based Flybe claims to be one of only a few European airlines to report profits since the financial crisis, reporting a £6.8m surplus in the year to March 31, although this was down from £12.8m the previous year. It employs more than 2,900 people and operates 215 routes across Europe.

The Flybe brand is eight years old but has traded under various names, starting out as Jersey European Airways Jersey European was founded in 1979. It later became British European Airways as it expanded with the backing of Sir Jack Walker, the steel tycoon who owned Blackburn Rovers football club.

The Walker family trust owned nearly 70% of Flybe before the float, but will see its shareholding diluted to 49%. British Airways retains its 15% stake and top management including Mr French hold 7%, with the remaining 8% of shares are owned by Flybe staff.

However, Flybe's start to life as a public company could be rocky if it fails to calm union anger.

Pilots' union the British Airline Pilots' Association (Balpa) threatened strikes on Tuesday saying a pay claim submitted to Flybe in February had been ignored, as had concerns over the way the airline organises its flying schedules.

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