1 AUGUST 2016
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Released to coincide with its AGM, the latest trading update from Exeter-based Flybe has warned of a £2.5m full-year profit hit because of currency fluctuations following Brexit.
“Although Flybe has hedged 90% of its US$ and fuel requirements for this financial year, the impact of a stronger US$ since the EU referendum vote will have a negative impact of £2.5m on full-year profit, if rates remain at current levels,” the document said.
CEO Saad Hammad noted Flybe was unlikely to be affected by the full impact of Brexit “in a significant manner” long term. But he said it is facing “significant external risks,” coupled with market uncertainty and “significant yield pressure”. France accounts for 13% of Flybe’s seat capacity.
In Q2, as of 25 July, Flybe increased its seat capacity by 14% year-on-year with passenger revenue up 1%. Yield is down 5% and revenue per seat tracking 11% lower, with 48% of seats sold versus 51% at the same point in 2015.
Flybe has agreed an average 2% three-year pay deal with pilots, cabin crew and engineers. It has in recent weeks renegotiated some of its aircraft deals. On Friday, shares were at a record low of around 38p and a market capitalisation of 83m.
Hammed, who earnt £425,000 from Flybe last year, is under particular pressure as he is also a director of Turkish airline Pegasus.
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