Flybe turnaround plan succeeding

Flybe has released a trading update ahead of the announcement on 10th June of its results for the year ended 31 March 2015 (FY15).The airline reports a return to growth in both seat capacity and revenue in 4Q15, having completed the first year of its three-year turnaround and says it is well positioned to continue its positive momentum.The airline delivered 15% additional capacity in 4Q15, but held its load factors constant and delivered 15% passenger growth. The required yield investment associated with the new capacity and lower spot fuel prices were more than offset by higher passenger volumes and overall passenger revenues increased by more than 5%.Results for the full FY15 to 31 March 2015 are forecast to be in line with market expectations, Flybe notes, with the carrier on track to achieve around break-even at pre-tax profit level, before the £26 million cost of the Embraer 195s and any impact of USD loan revaluation, but after the Finland joint venture write down of £10 million and EU261 flight delay provision of £6 million.Such a result would represent an improvement of £14 million on FY14’s loss of £9.0 million on a comparable basis, excluding the one-off effects of the Finland JV divestment, the EU261 provision, USD loan revaluations and last year’s restructuring costs, together with the benefit from the sale of Gatwick slots. “This clearly demonstrates the improvement in our core business,” say the company.Summer trading is also on track with the additional capacity selling through as planned. Meanwhile, the company’s cash position remains strong.Flybe chief executive Saad Hammad commented, “We're pleased to report a return to growth at Flybe, one year after our capital raise. These results demonstrate that we are beginning to deliver on the company’s growth opportunities and that we’ve tackled the majority of the company’s legacy issues. There is clearly more to do; further improvements in efficiency, further cost reductions and the resolution of our remaining surplus aircraft. However, one year into our turnaround, we have a clear line of sight towards profitable growth.”

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