FlyMe takes majority stake in Astraeus

Swedish low fares airline FlyMe has taken a majority shareholding in independent UK leisure carrier Astraeus.

Astraeus’ core operations in the leisure, oil and gas, and African markets will continue, based on its fleet of four Boeing 757s and two Boeing 737-700s at Gatwick and Manchester. The carrier’s fleet could double in size over the next 18 months following the deal. 

The airline’s extensive slot portfolio at Gatwick, coupled to its ability to grow the number of slots held to date, forms just one of many strategic reasons for FlyMe to acquire an interest in the company, a statement said.

Gatwick-based Astraeus’ original institutional investors, Aberdeen Asset Management, will continue to hold an investment in Astraeus alongside FlyMe, and the directors will retain an interest in the company. The airline was founded in 2002 and employs 390 staff with turnover of £100 million.

The statement said: “No staff changes are envisaged as a result of this move, and it is expected that a recruitment campaign will commence when the operating plans between the airlines have been finalised. As is the norm when any such transaction takes place, there will be some changes to the non-executive members of the Astraeus board, since FlyMe will be nominating three directors to the board.”

FlyMe, based at Gothenburg/Landvetter airport, has a fleet of five Boeing 737-300s employed on both domestic and international low-fare services from Gothenburg, Stockholm and Malmo. It is listed on the Swedish stock exchange and Fons Eignarhaldsfelag, the Icelandic investment company which also controls Iceland Express, is a major investor in FlyMe.

FlyMe chairman Bjorn Olegard said:  “Completion of the deal will mean that Astraeus will be a financially strong and debt-free company, with a significantly restructured balance sheet and a wide range of profitable contracts to secure its future revenues.”

The Astraeus statement said: “We will be able to achieve significant economies of scale from operation of a larger fleet of aircraft and have the much-needed financial strength to effect advance cover for our significant fuel and foreign currency commitments.

“It is probable that new activity to Scandinavia will be added to complement the activities of FlyMe and Iceland Express. FlyMe’s peak season is during the winter, and so surplus winter capacity could be moved from Astraeus into FlyMe to create profitable, year-round use of the aircraft.   

“This will start in the coming winter, since two of Astraeus’ remaining 737-300 aircraft will be operated in Sweden on behalf of FlyMe from November and December. Together with the potential to include Iceland Express at a future date, today’s announcement could see Astraeus’ fleet double over the next 18 months.”

Astraeus’ managing director Hugh Parry said: “Today’s announcement is great news for both Astraeus’ customers and the hard-working team who have helped to build the airline since its launch four years ago.

“The backing of a strong partner airline will allow us to expand and prosper, offering more routes and more flights across the markets that we serve.”

Report by Phil Davies