UK: Regional airline Flybe warns of revenue shortfall
FLYBE, Europe’s largest regional airline, today warned that revenue for the current year is likely to fall short of its previous expectations.
The company, a major operator out of Norwich Airport, said revenue for the three months to June 30, was 1.6% ahead of last year’s first quarter at �163million.
But passenger numbers were 3% down at 1.9 million, representing a load factor (the percentage of seats filled) of 62.4%, down from 63.1% in last year’s first quarter, which it said reflected “the continued challenging market conditions, particularly on UK to European business routes.”
Although market distortions from the Jubilee and the Olympics made forward booking visibility “extremely limited”, the current trend indicated revenue of growth of between zero and 2% for the year to March 2012, below its previous expectations.
“ As a result of the current revenue outlook, we are targeting further cost saving initiatives through a range of measures, including capacity management and supplier cost reduction,” added Flybe. “We will be providing an update on these initiatives with our interim results to September 30, 2012.
Flybe chairman and chief executive Jim French said: “2012/13 is proving to be another very challenging year in the European regional aviation sector with continued weak consumer markets and stubbornly high oil prices.
“After four years of consecutive decline, the UK domestic air market had shown signs of stabilising this year although June slipped back into 3% year-on-year decline. Whilst the UK to European leisure routes performed well in Q1, the UK to European business market has shown signs of weakness in recent months, leading to today’s revised trading outlook.
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“We remain cautious over the outlook and do not expect a material recovery in either consumer or business confidence in the short term. We therefore remain focused on executing our comprehensive action plan to both grow the business whilst mitigating cost pressures.”