Budget airline Flybe Group is to float on the London Stock Exchange next month in an IPO estimated to raise around £60 million.

The group said that half of the cash raised through the IPO will be used to buy new planes for its fleet.

The airline is already 15 per cent owned by British Airways, which indicated that it would be participating in the IPO.

Flybe reported pre-tax profits of £6.8 million in the full year ended 31 March, down 47 per cent from the previous year.

Jim French, Chairman and Chief Executive of Flybe, said, "We are delighted to bring Flybe to the market. The company has come a long way in a short time, from its origins as a provincial carrier to being one of Europe's leading regional airlines. A listing will assist Flybe in achieving the next stage in its exciting strategy for growth. We look forward to welcoming new shareholders on board for the next leg of our journey."

Willie Walsh, Chief Executive of British Airways, commented, "We are delighted to participate in the Flybe IPO. Since our divestment of BA Connect to Flybe in March 2007, we have been impressed with the achievements of Flybe and its management team. We are committed to supporting Flybe in its listing and capital raising, and wish Jim and the team every success as a public company."