Flybe fall in profits announced

Eleanor Steed
By Eleanor Steed June 8, 2017 17:46

Flybe fall in profits announced

In line with guidance provided in March, Flybe has announced an adjusted loss before tax loss of £6.7million, after IT write-downs of £4.8m. The reported loss before tax of £19.9 million excludes US dollar loan revaluation losses of £13.2 million. Flybe says that although the loss is at the lower end of its guidance range, the airline expects further IT costs of around £6 million in 2017/18 relating to cancellation penalties on existing contracts.

Flybe reported an 13.4% increase in group revenue to £707.4 million, compared to £623.8 million in 2015/16. Total revenue increased by 12.4% to £675.6 million. Passenger numbers increased by 7.6% to 8.8 million, while load factor for the period dropped by three percentage points to 69.6% reflecting a 12.3% increase in capacity due to legacy commitments to acquire additional aircraft. Passenger yield was stable at £70.20.

As previously reported Flybe is working on rationalising its fleet and has agreed to return six end-of-lease Bombardier Q400 aircraft to the lessors in 2017/18. As reported yesterday (include link), the Embraer aircraft being taken by Stobart Air are indeed from Flybe.

Flybe’s MRO entity, Flybe Aviation Services (FAS) is continuing to perform well with revenue up by 17.1% to £50.1 million, driven by a 39.5% increase in third party revenues leading to a 36.0% increase in profit before tax to £3.4 million.

As of June 5, 2017, Flybe has purchased 90.0% of its anticipated fuel requirements at USD490 and 88.7% of its anticipated US dollar requirements at USD1.41 for 2017/18.

Christine Ourmieres-Widener, Chief Executive, said: “I am truly passionate about the airline industry and I see tremendous opportunities for Flybe to connect and engage with communities and to establish a reputation for excellence in serving our customers. We will be successful in delivering by continually focusing on our costs, increasing our knowledge about who our customers are and what makes them tick, achieving industry-leading operational excellence and implementing a great digital platform.”

Also this week, Flybe has announced a new alliance with another UK regional airline, Eastern Airways, which is the first step towards finalising a five year franchise partnership where Eastern will operate its scheduled route network under the Flybe brand. The airlines will also agree a joint revenue and risk sharing agreement covering four Eastern aircraft to fly existing Flybe branded routes from Aberdeen, Edinburgh, Glasgow and Manchester. The four aircraft will operate under the Flybe franchise.

The aim is for contracts to be finalised and signed within the next few weeks, although tickets are already on sale.

Eleanor Steed
By Eleanor Steed June 8, 2017 17:46