British Regional demand takes off

SHARES IN British Regional Air Lines, the small European carrier, jumped by 14 per cent yesterday when the company reported surging demand for flights on its 50-seat jets.

With profits up by more than one-third, the shares began to recover the status they enjoyed before the collapse of small cap stocks in September last year, rising by 10p to 80p.

The full-year results are the first since British Regional came to market in June last year, opening at around 100p a share. Yesterday the board declared its first dividend of 0.88p.

Three months after listing, the group was rocked by the economic gloom caused by the rouble crisis, which hit transport stocks particularly hard.

Airlines also suffered under the impact of discount competition from EasyJet and Go!, the carrier owned by British Airways. Amid warnings of a softening travel market, the shares took two months to plummet from 100p to below 30p.

Terry Liddiard, the chief executive of British Regional, responded by stepping up a successful experiment with 50-seat jet aircraft.

This class of jets became profitable to fly only last year and have proved valuable to small airlines that could operate less popular routes without the strain of having to fill 100 seats per flight. The jets also hold much greater passenger appeal than turboprop aircraft.

Mr Liddiard has bought six more jets and plans to convert the entire fleet of 45 aircraft as soon as he can.

The airline is also moving into new routes, including some from Sheffield, the UK's fifth-largest City. Sheffield only recently gained its own airport.

Amid last year's economic travails, few investors drew a sharp enough distinction between discount carriers such as EasyJet and regional airlines such as British Regional.

Analysts point out that cut-throat fare cutting has little effect on British Regional because it is usually the sole carrier on its typical routes. Where it is not, it has shown in the past that it is perfectly capable of fighting off competition.

Forecasts for 1999 are already being upgraded from the pounds 6m profit that analysts had expected. At 80p, the shares are on a forward price/earnings ratio of around eight - a hefty discount to the market - and qualify as a long-term buy.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor