Turnaround plan gives wings to Flybe’s first half performance
LOW cost airline Flybe has announced a significantly improved financial performance under its new management team. In addition, it has pledged that a new phase of efficiency improvements announced today will secure a strong base for future growth but has warned of further redundancies.
It said the first two phases of the turnaround plan were on track to deliver savings of £40m this year and £45m in 2014/15.
For the first half, there was a 20.4% increase to £477.3m (H1 2012/13: £396.3m) in revenue under management (including Flybe Finland, the joint venture with Finnair) largely driven by increased contract flying activity in Finland.
This was supported by a 3% increase in group revenue to £351.1m; pre-tax profit rose to £13.8m, overcoming a loss of £1.6m for the same period last year.
There was also a £10.5m operating cash inflow before the increase in restricted cash and restructuring costs (H1 2012/13: £1.6m).
Flybe said its aim was now to become the best local airline in Europe delivering unrivalled regional connectivity.
The airline will have two engines of growth:
– A regional branded airline giving “a nimble and customer-friendly, scheduled service for both business and families”. It said this brought people together within a country and connected people in the regions to international carriers at metropolitan airports.
– A regional white label model where Flybe will become the leading regional provider for mainstream European airlines.
It said the already announced Phase 1 and 2 cost savings were being successfully implemented.
Saad Hammad, Chief Executive Officer, said: “I joined Flybe in August this year. It was clear to me that the existing Phase 1 and 2 cost savings were necessary, but we simply needed to do more and to do it immediately.
“The business needed action now and so today we are explaining our next phase which encompasses a review of everything we do and how we do it. Most of the immediate actions are completed, being implemented or already being consulted on. Unfortunately there is a proposal for further redundancies.
“We will consult with the trade unions and employees to ensure that this is done fairly and delivers the right outcome for the business.”
While the economic environment remains challenging, the board said it was confident the actions announced would provide a firm basis for future growth, he added.
“We will make Flybe the best local airline in Europe. This is ambitious, but achievable provided that we can transform our cost base and efficiency now,” he said.
