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Flybe back on course as revenues rise

Published: 17:17 07 Apr 2015 AEST

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Flybe’s (LON:FLYB) turnaround plans have been given a lift by rises in capacity and passenger revenue.

The Exeter-based budget carrier, which is working through a three-year cost-cutting plan and route re-organisation, added 15% more seats in the three months to March and held load factor constant at around 70%.

Overall, passenger revenues climbed 5% in the three months to March and chief executive and former easyJet director Saad Hammad said the full-year results were in line with market expectations of a pre-tax break-even position for the year just ended.

This represents a £14mln underlying turnaround compared to losses of £9mln last year, Hammad said.

This year has started well, he added, with new routes at London City Airport showing progress. The upbeat update comes after a tough third quarter, though Flybe said plans to get rid of its surplus Embraer planes were behind schedule.

Hammad added the latest results demonstrate that Flybe is beginning to deliver on its growth opportunities and that it’s tackled the majority of 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."

Broker Northland Capital Partners said 4Q14 trading reads well. "It appears the robust trading has carried through into the 1Q16 which is encouraging.

"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 in our view."

Shares climbed 1% higher to 58p in early deals.

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