Flybe issues profit warning
Flybe has issued a profit warning after a ‘softening’ in its revenue outlook for the second half of the year.
It said consumer demand in domestic and near-continent markets has weakened in recent weeks and the Board now expects this to continue into the second half.
"This together with higher fuel prices and weaker sterling will impact the expected second half profit performance," it said in a trading update.
CEO Christine Ourmieres-Widener said: "We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market. We are reviewing further capacity and cost saving measures while continuing to focus on delivering our Sustainable Business Improvement Plan.
"Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs. We continue to strengthen the underlying business and remain confident that our strategy will improve performance."
Flybe said a reduction in capacity has pushed up load factors by 7.2 percentage points to 86.6%, a record load factor for the summer season.
Passenger revenue per seat was up 6.8% as capacity reduced by 10%.
For the first half as a whole, the load factor increased by 8 percentage points to 84%, with passenger revenue per seat estimated to be up 8%.
But it said yield was down around 2%, 1% of which relates to the impact of the removal of credit card fees from January 2018.
Adjusted profit before tax for the first half is expected to be similar to last year’s £9.4 million despite year-on-year cost increases of around £17 million arising from the lower value of sterling and fuel and carbon price increases.
"While the Board’s visibility on fourth quarter revenue is limited at this stage, it is now estimated that the full year adjusted loss before tax will be of the order of £12 million, compared to a £19.2 million loss in the last financial year," it said.
This includes the benefit of a £10 million onerous lease provision release and £29 million of adverse year-on-year impact from weaker sterling, fuel and carbon prices.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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