Flybe profit warning

A share price drop of more than a third hit Flybe last week after the airline issued a trading update saying its full-year adjusted profit figure would be “lower than market expectations”.

Flybe said it had seen good revenue performance in the first half of the year set against the backdrop of increasingly adverse fuel and currency impacts but recent trading indicated a softening in the second half revenue outlook.

First-half load factor increased by eight percentage points to 84%, with passenger revenue per seat estimated to be up 8%. Yield was down about 2%, about 1% of which related to the impact of the removal of credit card fees from January 2018, the airline added.

“Consumer demand in domestic and near-continent markets has weakened in recent weeks and the board now expects this to continue into the second half,” a statement said. ”This together with higher fuel prices and weaker sterling will impact the expected H2 profit performance.”

Flybe said it now estimated a full-year adjusted loss before tax of about £12m against a 2017/18 loss of £19.2m including an estimated £29m of adverse year-on-year impact from the sterling and fuel considerations.

CEO Christine Ourmières-Widener said Flybe was reviewing further capacity and cost-saving measures while continuing to focus on delivering its sustainable business improvement plan. “Stronger cost discipline is starting to have a positive impact across the business” she added.

www.flybe.com

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