Flybe, Europe’s largest regional airline, has announced its financial results for the year ended 31st March 2016 with the news that it has returned to profit for the first time since its market flotation in 2010 and after five intervening years of financial loss.
The airline has reported adjusted profit before tax of £5.5m compared to a loss before tax of £25.4m in 2014/15; and a reported profit after tax of £6.8m compared to loss after tax of £35.7m in 2014/15.
It has achieved this by:
- Growing passenger volumes by c6% across an expanded route network and returned to revenue growth (+8.7% vs. prior year), despite a very difficult trading environment.
- Reducing cost per seat costs (at constant currency) by 4.2% including fuel and by 2.2% excluding fuel.
- Resolving its last key legacy issue by redeploying the remaining E195 aircraft on regional routes in arrangements with regional airports. This has halved the outstanding liability to the end of the lease term on these aircraft to £40m. With the redeployment of the E195s, all of the Company’s key legacy issues have now been resolved and £750m of liabilities eliminated.
This performance was delivered despite the adverse industry-wide impact on bookings experienced following the events in Paris in November and in Brussels in March; despite the absorption of c£20m of cost relating to the legacy issue of its E195 jets, and the pressure on yields from industry-wide capacity growth acceleration and lower fuel costs.
Flybe CEO, Saad Hammad said:
“This year was the second full year of our three-year transformation plan and our performance has been very encouraging. We delivered top-line growth in a difficult revenue environment, expanding our network and carrying more passengers than last year. We drove our unit costs down further. We also resolved our last key legacy issue, with solutions delivered for our remaining E195 jets.
“As a result of all the action we have taken, Flybe is now a much more resilient business and well positioned for profitable growth. With the strongest balance sheet in our history and a disciplined organisation which is already taking cost and capacity actions to support profit growth in the coming year, we are confident that we are now well placed to navigate the current industry challenges.
“Flybe’s successful transformation is the product of our talented, dedicated and hard-working people and I am hugely appreciative of every single Flybe member of staff.
“As we enter the final year of our turnaround, we have set down strong foundations for the future and made good progress in transforming Flybe into a sustainable, world-class regional European airline.”
Airline performance highlights include:
- 8.2% increase in passenger revenue and 5.9% increase in passenger numbers
- Two new bases established (Cardiff and Doncaster)
- 52 new routes launched
- 47 existing business routes benefitted from additional daily frequencies
- New codeshares signed with Emirates and Virgin Atlantic
- Improved punctuality with 85.4% of flights having arrived within 15 minutes of scheduled time vs. 84.5% in 2014/15 and recognised by OAG as among the top 20 airlines worldwide for punctuality in 2015
- Named Best Short Haul Airline at the 2016 Business Travel Awards (January 2016)
- New SAS operation with four ATRs successfully launched in Stockholm.
- Brussels Airlines contract extended by two years as of October 2015 with two Q400 aircraft