Flybe H1 revenues increase but tough second half lies ahead

FLYBE, the largest airline in terms of traffic movement at both Birmingham Airport and Manchester Airport, has seen half year revenue growth of 6.4% to £341.6m.

The airline said despite the current economic conditions, which has seen a slowdown in sales since September, it was pleased with the performance but warned the second half would be tough.
 
“Flybe performed satisfactorily in the six month period to September 30, 2011. Revenues under management grew 9.1% to £350.2m compared to the volcanic ash-affected H1 2010/11 of £321.0m,” said the airline in a statement.

“The group achieved a profit before tax of £14.3m (H1 2010/11: £1.7m unadjusted, £19.8m underlying).  The adverse variance in H1 2011/12 profit before tax versus the underlying result for H1 2010/11 was primarily due to improvements in load factors and yields being more than offset by the adverse impact of fuel and USD in the period.”
 
It said that despite the UK domestic air travel market being 10% below pre-volcanic levels, and given that the UK represents around 70% of Flybe’s passenger volumes, the financial results demonstrated the resilience of its business model.  

Alongside good growth in load factors, it said it continued to benefit from a focus on revenue generation with revenue per seat, ticket yield and ancillary yield all showing increases.  It said it had also maintained its market leading positions.
 
“In Flybe UK, trading conditions remain challenging, as expected.  Forward ticket sales revenue for winter 2011/12 is currently down 1% year-on-year, while our capacity management programme means seats flown will be down by 6% against the previous year.  

“We will continue to monitor closely trends and review our flying programme to ensure that capacity remains optimally matched to demand. Across the Flybe group including Flybe Finland, however, we are expecting an increase in scheduled seat capacity managed by Flybe in winter 2011/12 of c7% year-on-year, with a similar increase in passengers,” it said.
 
Jim French, Flybe’s chairman and chief executive, added: “In terms of the business as a whole, through a focus on costs and capacity management, we continue to mitigate the impact of the economic slowdown in the UK; our UK to Europe sales are holding up well; we are pleased with progress in Flybe’s operations in Finland; and our balance sheet is stronger than at any time in our history.  Taken together, this gives us confidence both in the long-term future as well as ensuring we optimise our results for the current year.”