Flybe in the red after tough year
Monday 11 June 2012
Regional airline Flybe slumped to a "disappointing" full-year loss today despite growing its share of the declining UK passenger market.
It racked up losses in the UK of £2.2 million for the year to the end of March, compared to profits of £5.7 million the previous year, as it battled a 5% decline in the domestic market and high fuel prices.
But the carrier, which operates from 14 UK bases serving 102 airports in the UK and 17 other European countries, grew its share of its domestic market to 28% after passenger numbers lifted 2% to 7.3 million.
Its shares rose 5% as the group's underlying losses came in slightly lower than expected and analysts said it is set to benefit from recent falls in oil prices and any recovery in its markets.
Flybe Finland, the company's joint venture with Finnair started nearly a year ago, already operates 25 routes in six countries and has scope for further expansion amid consolidation in the industry.
Losses for the group were £7.1 million, compared to a £22.3 million profit in the previous year.
Chief executive Jim French said: "We remain in a challenging environment. However, Flybe today is a business of real scale and substance and one which has again demonstrated its resilience."
Flybe's forward ticket sales for the summer were up 4.5% on broadly flat seat capacity.
It said it has moved quickly to capitalise on BMI Baby's announcement that it will stop eight of its routes from East Midlands Airport by announcing several new services of its own.
A quarter of its passengers are now carried between the UK and Europe and it believes the recent strengthening of the pound may encourage more holiday makers to use its services.
Andrew Fitchie, an analyst at Investec, said the company's drive to contain costs while investing in its fleet and expand overseas will "pay off handsomely" given time.
He revised up his forecasts, saying he expects the airline to return to profit in the current year, with a £500,000 surplus compared to his previous estimate of a £1.3 million loss.
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