Liberum reiterates 'hold' rating on Flybe

Liberum raised its target price on FlyBe to 43p from 36p and left its recommendation at 'hold', citing the low-cost carrier's continued strong commercial performance after capacity issues had been brought under control.

With 18 months of unit revenue improvements already under the belt, Liberum said improvements were set to continue, driven by mix and supported by further cuts to available seats.

FlyBe saw revenue per seat rise 10.1% in March 2018 as a result of capacity cuts.

However, Liberum noted that a poor unit cost performance had prevented FlyBe's improved revenues from driving better profitability.

"Some cost headwinds will moderate or not recur, but clear evidence of progress on non-fuel unit costs is needed to support the investment case," the broker said in a note.

Back in June, Flybe revealed that profits were expected to nosedive following a series of setbacks from poor weather.

Annual pre-tax losses were projected to widen to £15.7m despite an expected 7% growth in revenue to £755m.