Flybe struggles

Exeter-based Flybe, which floated on the London Stock Exchange in December 2010, has forecast flat revenue and rising costs.  It now expects group revenue for the year ending 31 March 2013 to remain in line with 2011/12, at the lower end of its previous guidance.

In a trading statement issued last week the airline also forecast underlying costs, including fuel, would rise by about 2.5% year-on-year.  Its underlying loss, before tax for 2012/13, is therefore expected to be “within but at the lower end of previous guidance”.  Shares stood at 42.5p as against the original price of £3.50.  IAG is a 15% shareholder.

Forward sales for Flybe’s UK summer 2013 programme are 2% ahead of the same time last year, on capacity up less than 1%.

Revenue under management, including Flybe Finland, its joint venture with Finnair, is forecast to rise by around 15% year-on-year, due to an increase in contract flying operations.  With the vast majority of clients now paying in advance, rather like most scheduled airlines, its cash in hand is positive, now standing at £54.4m, higher than previous expectations.

In January Flybe announced its ‘Delivery and Future Direction’ restructuring programme, targeting £35m of savings by 2014/15 and says this two-stage plan is progressing well. www.flybe.com

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