Airline still flying high in face of terror fears

TERRORIST alerts following the attacks on Paris last year failed to slow the improvement in growth of European airline Flybe.

The airline, the largest at Manchester and Birmingham airports in terms of passenger volume, said in a trading update today that the gradual improvement to its services seen during the first half of the last financial year had continued into its third quarter.

Performance also held firm against rival growth and lower fuel costs, it added.

During the period, which covers the three months from October 1 to December 31 2015, Flybe said it had focused on yield protection and accelerated some of its cost saving initiatives, while also reducing its fourth quarter capacity growth rate by c10ppts.

The period also saw a 10.1% increase in seat capacity to 2.8 million seats (Q3 2014/15: 2.5 million seats), a 2.1% increase in passenger volumes to 1.92 million (Q3 2014/15: 1.88 million passengers) and a 3.6% growth in passenger revenue to £128.9m (Q3 2014/15: £124.4 million).
 
There was also a 1.2% improvement in passenger yield to £67.66 (Q3 2014/15: £66.84).
 
Forward bookings for Q4 were said to reflect the airline’s increased schedule focus on business travellers with their late booking profile.

With this in mind, the airline said its focus on business travellers was being increasingly recognised and this month it was named Best Short Haul Airline at the 2016 Business Travel Awards.
 
Flybe chief executive Saad Hammad said: “The tragic events in Paris overshadowed this last quarter and caused a significant hiatus in airline bookings, not just to France, but also on UK domestic and near-continent travel.

“As we expected, the combination of higher capacity in the market and lower spot fuel prices have led to lower yields sector-wide, even as the benefits start to come through from the unwinding of fuel price hedging. In this uncertain environment, we decided to protect yields rather than to chase unprofitable marginal revenue.
 
“As a result, revenue has grown by 3.6%, and this, together with continued reductions in unit costs, reinforces our resilience as a business, now that all legacy issues have been resolved.”

He added that passenger demand was now slowly recovering and reflecting a later booking profile, while it was also encouraging that the airline’s focus on business travellers was increasingly being recognised as amongst the best in the industry.