Paris terror attacks forced Flybe to slow growth
Flybe’s passenger numbers remained flat in the fourth quarter of last year at 1.8 million.
The airline increased its capacity by 2.4% during the quarter, which ended on March 31, leading to a two percentage point fall in its load factor to 68%.
The airline said seat capacity was increased ‘at a temporarily lower rate’ during the period following the terror attacks in Paris last November.
"This agile response ensured Flybe mitigated lower load factors with stable yields and delivered passenger volumes and revenue in line with the fourth quarter of last year," it said.
Results for the full year are anticipated to be in line with market expectations, added the airline.
In March 2016, Flybe took ownership of three Q400 aircraft, previously on operating leases, for $34 million.
"This is in line with Flybe’s strategy of rebalancing its aircraft fleet away from reliance on operating leases and towards outright ownership which brings the associated margin uplift," it said.
Flybe’s cash position remains strong with total cash of £171.3 million at 31 March 2016, it added.
For this summer, it has added 17% more capacity compared with last year. So far, it has sold 21% of its seats, three percentage points behind this time last year, which it said was due to extra frequencies on 34 existing routes and the launch of 39 new ones.
The airline has now hedged both fuel oil and US dollar to 90% of its 2016/17 exposure. The rise of the value of the dollar since the turn of the year has increased the airline’s operating costs for 2016/17 by £7 million.
Chief executive Saad Hammad said: "This last year has seen enormous progress at Flybe. We completed the resolution of the key legacy issues while significantly improving our service and customer offering.
"We are carrying more passengers across a growing route network and doing so at a lower unit cost.
"Against the background of the highest level of market capacity growth for six years driven by low fuel prices, we continue to be disciplined in deploying our capacity, focusing investment on routes where airport partners provide cost mitigation and those which adhere strictly to our business model. We are also continuing to reduce unit cost, which provides margin resilience, as well as reviewing our capacity growth rate beyond this summer.
"Our booking profile for the summer reflects our capacity investments and our growing appeal to business travellers who typically book as close as possible to their day of travel.
"We look forward to making further progress over the coming year as we enter the next chapter of our journey which is focused on disciplined and profitable growth."
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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