Flybe boosted by growth in seat capacity, passenger revenue

Budget airline Flybe reported a growth seat capacity and revenue in the final quarter of the year, as it completed the first 12 months of a three-year cost-cutting plan.

The London-listed company said capacity increased 15% year-on-year in the three months to March, while load factor remained constant at 70% and passenger volumes increased 15% from the corresponding period in 2014.

The group added that the required yield investment associated with the new capacity and lower spot fuel prices were offset by higher passenger volumes, while overall passenger revenues rose by more than 5%.

In a statement released on Tuesday, Flybe said annual results are expected to be in line with forecast, with the Essex-based carrier in line to achieve a pre-tax breakeven, which would represent a £14m underlying turnaround from the £9m loss reported last year.

Group chief executive Saad Hammad said the airline had started the new year on a positive note, boosted by positive performances from new routes at London City Airport and it remained focused on delivering growth.

"There is clearly more to do; further improvements in efficiency, further cost reductions and the resolution of our remaining surplus aircraft,” he said.

“However, one year into our turnaround, we have a clear line of sight towards profitable growth."

Analysts at Northland Capital Partners described as “encouraging” that the company had carried the momentum generated by its fourth quarter trading into the new year, but warned of legacy issues.

“Investors will find the improvement in trading encouraging however some of the legacy issues which still plague the business could prove to be a drag on the share price over the near term,” said Northland Capital Partners analyst Michael Campbell.

Flybe shares were up 1.74% to 58.50p at 08:56 on Tuesday.