Flybe reports better load factors but bad weather blows finances off course

Flybe, which operates routes from Manchester Airport and Liverpool John Lennon Airport, said its turnaround continues, but reported a financial hit from cancellations due to bad weather.

In a trading update covering the fourth quarter it said it has continued to improve load factors, while reducing capacity, with load factors up by 6.8% to 73.5%, which it described as a strong performance for the winter season.

As a result, estimated passenger revenue per seat was up by 9% to £50.84.

Passenger numbers rose by 3.7%, even though capacity was reduced by 6%.

In the quarter to March 31, Flybe flew two million passengers, compared with 1.9m in the same quarter in 2017.

The extremely poor weather in February and March, however led to airport closures and flight cancellations across the UK and the near continent.

This particularly affected Flybe as all its flying is within this area.

The operator had to cancel 994 flights due to weather in the fourth quarter, compared with 372 in the same period last year.

As a result, the carrier anticipates this will have an impact of around £4m from lost revenue and additional care and assistance costs on cancelled and delayed flights.

Coming so late in the financial year this means that this added loss will be reflected in the full year financial results.

At March 31, 2018, Flybe had returned five of the planned six end-of-lease aircraft with the final one to be returned in early April.

At the year end, Flybe will have a total fleet size of 80 aircraft, compared with 83 a year ago, which will fall to 79 once the final handback is completed.

Net debt is expecteed to be broadly flat year-on-year.

Looking towards the summer trading period the airline’s strategy to reduce capacity to focus on profitable flying will continue into the new financial year.

Very early indications of summer trading are encouraging with an estimated 7.5% increase in passenger revenue per seat offsetting an expected 7.9% decrease in capacity.

So far, Flybe has sold 21% of its first half capacity, against 20% sold at the same time last year.

Chief executive Christine Ourmieres-Widener said: “The Flybe strategy as set out in our business plan to reduce the fleet size is delivering higher load factors and revenue per seat.

“The drive to reduce costs is continuing, given added impetus by the rise in fuel prices and lower value of sterling.

“Despite these headwinds, the foundations are being put in place to strengthen the business and we remain confident that our strategy will continue to improve performance as we go into the new financial year.”