Flybe profits up 14%
08.09.08
Flybe reported a 14 percent rise in first-quarter profits today. Despite ‘undoubted challenges’, the regional budget airline said it had performed strongly as its fuel-efficient fleet and hedging strategy protected it from surging oil prices. A lower dependence on leisure travel - with 80 percent of its capacity aimed at business and regular travellers - also helped to insulate the business from the effects of the global recession.
The airline increased its pre-tax profits 14 percent to £12.2 million in the three months to June 30. Annual results for the year to March 31 also published today showed record underlying pre-tax profits of £35.4 million after successfully integrating BA Connect, the loss-making regional arm of British Airways bought in March 2007. The deal transformed Flybe into one of Europe's largest regional airlines and helped lift sales this year by 46 percent to £535.9 million.
Flybe's fuel cost per seat rose 44 percent over the three month period due to the ‘unprecedented’ oil prices, but fuel accounts for less than 25 percent of its costs. A spokesman said that around 60 percent of its fuel was hedged 12 months ahead, with only 10 percent completely unhedged.
Flybe operates 520 flights a day on more than 190 routes to 12 countries, also flying from Exeter, Manchester, Birmingham, Norwich, Southampton, Belfast, the Channel Islands and the Isle of Man. It is the UK's leading regional domestic carrier with 35 percent of the market outside London. Next month the airline will become the second largest in Scotland after striking a franchise deal with Loganair, which will see the Glasgow-based carrier's 16 aircraft rebranded with the Flybe livery.
Flybe will look at potential acquisitions as rivals struggle in the tougher operating climate and the industry enters a period of consolidation, Chairman Jim French said. The airline is 69 percent-owned by the family trust of late founder Jack Walker, with Mr French holding 7 percent and other management 9 percent. It plans to float next year.
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