Flybe sees full year losses widen
FLYBE, the largest airline in terms of traffic movement at both Birmingham Airport and Manchester Airport, has seen full-year pre-tax losses widen by more than 44% to £6.2m.
The airline, which called the results “disappointing”, has blamed the losses on the estimated impact of the disruption caused by last year’s volcanic eruption in Iceland, severe winter weather, unrealised gains and losses on fuel and foreign exchange hedges together with Initial Public Offering expenses.
“The headline result, in line with expectations but disappointing nevertheless, reflects the impact of a challenging operating environment, in particular in the UK and major investment in our business for future growth,” said the airline in its results statement.
“It is a testament to the group’s business model and its resilience that, despite the continued decline in the UK domestic air travel market, which totals some 20% since 2007, combined with significant cost increases – the annualised price of oil being the highest ever recorded in history, airport infrastructure costs increasing significantly above RPI and also government taxation through APD continuing to increase – the group’s overall operating loss for the year was limited to £4.9m.”
It said it continued to invest in the company’s future, making significant progress on its three-pronged growth strategy which is designed to position the group to capitalise on UK recovery; expansion into Europe; and a major fleet upgrade.
Full year revenue increased 14% to £678.8m (2010/11: £595.5m). Underlying EBITDAR fell 22% to £88.8m (2010/11: £113.8m) with an operating loss of £4.9m (2010/11: loss of £0.9m) and a loss before tax of £6.2m (2010/11: loss of £4.3m).
“This performance, while disappointing, reflects a resilient business able to weather the combined impact of a 5% underlying decline in its core UK market during the year along with high fuel prices and other inflationary pressures.
“The results also reflect significant investment in the group as part of the implementation of a long term growth strategy, specifically representing the first year losses associated with our Flybe Europe division (£3.7m) and our new training academy building in Exeter (£1.2m). Without these investments, the loss before tax would have been £1.3m, or approximately 0.2% of turnover,” it said.
Jim French, Chairman and Chief Executive Officer of Flybe, said: “We will continue to invest in the group’s future ensuring that we maintain our market leading regional position in the UK and, at the same time, seeking to build a similar position across Europe.
“We remain in a challenging environment. However, Flybe today is a business of real scale and substance, and one which has again demonstrated its resilience. Flybe is well placed to take advantage of any improvement in the UK macro environment and has a strong platform in Europe to leverage, leaving the group strongly placed for the future.”
