Profit warning hits Flybe founder in the pocket
Wednesday 11 January 2012
Jim French, Flybe's founder and chief executive, was nursing losses of more than £550,000 yesterday as the regional airline's second profit warning in three months sent the shares to a record low.
Mr French, who owns 5.34 per cent of the carrier, warned that the UK domestic market was "clearly challenging" as Flybe endured a particularly disappointing December. The shares plunged 20 per cent to 55p, wiping more than £8m off the airline's value.
Flybe is suffering from sluggish UK trading, which accounts for 70 per cent of its business. Its sales slump worsened from an underlying 6 per cent slide in the first half of the year to 8 per cent between October and December.
Mark Manduc, an analyst at Bank of America Merrill Lynch, said: "Assuming that Q3 trends continue into Q4 – and no material cost changes – we expect consensus for 2011-12 to move to a pre-tax loss of around £10m."
Mr French, whose airline operates 203 routes serving 18 countries, defended his decision to keep growing market share by sacrificing price increases to "protect the long-term potential of Flybe".
The company is selling off surplus aircraft and "aggressively" managing capacity and costs, as well as broadening its reach in moves such as its recent swoop for Finnish Commuter Airlines.
"We identified some time ago the need to lessen our dependence on the UK market and our move into Europe last year is progressing well," Mr French said.
Andrew Fitchie, an analyst at Investec, said: "Given the likely disappointment over a further downgrade and the remaining uncertain trading outlook, it is difficult to see the share performing in the short term."
- 1 British tourists 'murdered' in Thailand: Pair's bloodied bodies found naked on Koh Tao beach
- 2 Vivienne Westwood says 'Yes' to Scottish Independence by declaring: 'I hate England'
- 3 Welcome to Cameroon, where drinking Baileys can lead to imprisonment
- 4 Lego breaks out of the toy box and heads for the gallery
- 5 Vogue under fire for 'Big Booty' article
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...