28th Jan 2016 09:03
LONDON (Alliance News) - Flybe Group PLC said on Thursday it had continued its return to growth in the recent quarter by accelerating its cost cuts to counter the impact of higher industry capacity and reduced travel following the November terrorist attacks in Paris.
The European airline said passenger revenue was up 3.6% in the three-month period to December 31 to GBP128.9 million from GBP124.4 million. It said it had seen a 10.1% increase in seat capacity, to 2.8 million seats, and a 2.1% increase in passenger volumes over the period, with 1.9 million passengers.
Flybe said it focused on yield protection and accelerated its cost savings initiatives. As a result, its cost per seat was down 4.7% in the UK, including fuel. Excluding fuel, this reduction was 2.2%.
Flybe said yields have come under pressure across the industry due to higher capacity and lower spot fuel prices, which have encouraged some airlines to cut fares. Flybe said the benefits of lower fuel prices are starting to come through as its fuel price hedges unwind.
The company said its strong forward bookings resulted from focusing its schedule on time-sensitive business travellers with their late booking profile. Forward bookings show a 3.2% increase in seat capacity from a year before and a 2.0% increase in yield but a 6.2% decrease in passenger revenue per seat.
"In this uncertain environment, we decided to protect yields rather than to chase unprofitable marginal revenue. Passenger demand is now slowly recovering and reflecting a later booking profile," said Chief Executive Saad Hammad.
Flybe shares were down 2.1% at 82.70 pence on Thursday morning, recovering somewhat after touching an intraday low of 75.33p.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Flybe Group