Flybe’s wings to be clipped again despite profits
The new boss of Flybe has set out plans to cut another 500 jobs, reduce routes and review its fleet, despite turning a £13.6m half-year profit.
That compares with a £1.6m loss for the regional airline in the six months to October 2012, but the chief executive Saad Hammad, the former easyJet executive who began piloting Flybe in August, said the return to the black was “driven by cost-cutting, and we need to do more of it”.
Flybe’s founder and chairman Jim French quit unexpectedly last week, having told staff that the outlook had improved after a “heavy, tough journey”. Mr Hammad, however, had a different view today, saying: “We simply need to do more and to do it immediately.I’m not in the blame game.” But he added: “We have too much headcount in the business, an expensive fleet and routes that are not performing. We have built up over time a cost base that is not sustainable.”
The latest results reveal that three former directors who left Flybe shared a £1m pay-off. Mr Hammad said the new round of job cuts would be spread around the business. “They are not focused purely on frontline staff – they will encompass pilots and cabin crew but also middle and senior management. We all share in this.”
But pilots’ union Balpa said it was “shocked” by the decision. Flybe’s passenger numbers actually rose 5.6 per cent to 4.3 million in the half year.
Ryanair has issued two profit warnings in two months. But “We’re very different from [that] focus on “bucket and spade” customers and stag weekends,” Mr Hammad said. “We’re connecting the regions in the UK, that’s our core business.”
He admitted that meant being more reliant on the British economy, but added: “We are seeing some green shoots across the UK – the problem is it’s very fragile.”
He also said Flybe – which pulled out of Gatwick earlier this year, selling its 25 daily slots to easyJet for £20m – could see a return to the capital.
“We’re hoping to come back to London in the fullness of time,” he said. “London is in our pipeline.”
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