19th Jun 2018 10:44
LONDON (Alliance News) - Flybe Group PLC on Tuesday posted an annual loss despite increasing revenue, passenger numbers and load factor.
Flybe's pretax loss for the financial year ended March was GBP9.4 million - helped by a GBP11.1 million gain on USD aircraft loans revaluations - narrowed from a GBP48.5 million loss the year before. The airline said this year's loss was in line with expectations.
The company's GBP48.5 million pretax loss in the financial year 2017 was restated from GBP19.9 million owing to a non-cash onerous lease provision and impairment of related assets.
The airline's adjusted pretax loss widened to GBP19.2 million from GBP6.7 million. The airline said "additional maintenance costs, onerous IT contract provision, reduced hedging gains and the weather disruption" worsened its adjusted pretax loss.
The Exeter-based airline's revenue increased 6.4% to GBP752.6 million from GBP707.4 million. Its passenger volume increased 7.7% to 9.5 million from 8.8 million the year before.
This led to a passenger revenue increase of 9.1% to GBP675.8 million from GBP619.3 million. Flybe's load factor improved by 6 percentage points to 75.6% from 69.6% the year before.
The company did not pay or propose a dividend in the financial year 2018 or the year previous.
Looking ahead, Flybe warned that the "European aviation market continue to be challenging". The company believes it "offers a differentiated regional business model" and can "deliver a sustainable profitable future".
Chief Executive Officer Christine Ourmieres-Widener said: "Flybe has made significant progress during my first full year as CEO. With our fleet size under control, we are already delivering improvements to passenger yield, load factors and revenue. Our Sustainable Business Improvement Plan, launched last year, is enhancing the business in a number of key areas including, network decision-making, revenue management and commercial performance. Profitability has however been impacted by higher maintenance costs, IT investment and the poor weather in the final quarter.
"We now have a new senior management team in place, with greater aviation experience, and we are all focused on delivering the business plan through continued improvements to revenue, a renewed focus on cost reduction and therefore achieving profitability.
"There is growing awareness of the importance of regional air connectivity, not just to the economy and in connecting people, but also in connecting customers to long-haul services with increased interest from legacy carriers. This is shown by the success of our new routes in Heathrow and the growth in our codeshares. Flybe has a unique position in UK connectivity and in its relationship with 9 million UK passengers."
Shares in Flybe were down 9.8% at 36.00 pence each Tuesday morning.
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