Flybe gives close-of-period trading update

Flybe Group has given a trading update for the year ended 31 March 2014, ahead of the announcement of its audited results on 11 June.

The Group reports that it performed in line with management expectations through the final quarter of the year ended 31 March 2014.

Despite a 4% capacity reduction in Flybe’s UK scheduled airline in 4Q13/14 to 2.2 million seats from 2.3 million seats in 4Q12/13, passenger volumes grew 6% year-on-year to 1.6 million, with load factors increasing by 6 percentage points to 70%. The company attributes this to the continued success of its pricing strategy to offer more attractive lead-in fares, with higher passenger volumes more than offsetting lower yields, leading to a 4% increase in passenger revenue per seat to £49.80.

Following the successful completion of the firm placing and open offer raising £150 million (net) in March 2014, total cash at the year end was £218 million.

The Group says it remains on track to deliver both Phases 1 and 2 of the Turnaround Plan (announced in January and May 2013), and the Immediate Actions (launched in November 2013). Collectively, these generated total savings in 2013/14 of £47 million, and are expected to deliver around £71 million of savings in 2014/15, in line with the targets outlined in November 2013.

Management continues to review operating practices throughout the Group, with the aim of driving improved performance across the simpler, leaner business structure following the launch of ‘One Flybe’ in November 2013.

Flybe’s White Label business in Finland (part of the Joint Venture with Finnair) continues to be profitable, performing in line with expectations. However, the Joint Venture is addressing the performance of the scheduled flying part of the business, withdrawing two (of the six) aircraft from service in 1Q14/15.

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