Flybe announces heavy loss
Flybe made a pre-tax loss of £35.6 million in the financial year to the end of March, compared with a profit the previous year of £8.1 million.
The figure included £4 million to settle claims from passengers whose flights were cancelled or delayed before April 2014, after a court ruled that Flybe had been wrong to deny claims brought for flights disrupted by technical faults.
Flybe saw a 7.5% drop in revenue to £574 million for the year, as a result of a reduction in charter flying and a planned 7.6% cut in capacity.
As a result of the capacity cuts, its load factor reached an all-time annual high of 75.2%.
Chief executive Saad Hammad said: "We have just completed the first full financial year of our three year transformation plan. Despite a more challenging environment than anticipated, significant progress has been made.
"There is much more to do, but I am keen to put on record my thanks to all our pilots, cabin crew, engineers and everyone in the field and at HQ in Exeter for their commitment and effort. Flybe is back on track to recovery and profitable growth."
The airline said that it had taken ‘significant steps’ to reduce its cost base, including shedding 65 staff, a reconfiguration of the routes it serves, and the sale of its loss-making joint venture in Finland.
"As a result, there are a number of one-off and technical items that mask the underlying profit performance," it said, pointing out that the £35.6 million loss was affected by non-cash
revaluations on its US dollar loans, that are intended to be hedges against the value of each aircraft, whose value is in dollars.
It stressed it had a ‘robust’ balance sheet with free cash of £177.9 million at the end of March 2015.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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