Flybe, in its trading outlook, stated (10-Aug-2012) that although forward booking visibility remains extremely limited, the continuing challenges in the UK and Eurozone economies, together with distortions from the Jubilee and Olympics, mean that Group revenue trends for the 12 months to 31-Mar-2013 currently point to year-on-year growth of between flat and 2%, which is below previous expectations. On a cost side, the carrier said it will "continue to maintain a tight control on costs, keeping unit cost increases (excluding fuel) in Q1 2012/13 to within 1% of prior year, despite significant infrastructure and regulatory cost pressures". As a result of the current revenue outlook, the company is targeting further cost saving initiatives through a range of measures, including capacity management and supplier cost reduction. The carrier will be providing an update on these initiatives with its interim results to 30-Sep-2012. The impact of these further initiatives in 2012/13 mean the company expects Group costs excluding fuel to be flat year-on-year and, including fuel, to increase by around 2.5%. The company also expects the group to deliver positive EBITDA and operating cash for the 12 months to 31-Mar-2013. Flybe chairman and CEO Jim French added, "the removal of debit card fees as directed by the Office of Fair Trading has proved a further challenge to us this year". [more - original PR]
Flybe downgrades revenue full-year target amid, positive EBITDA result forecast
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Flybe: largest regional airline in Europe leads the airline capacity growth charge in winter 2016/17
The surprise departure of Flybe CEO Saad Hammad on 26-Oct-2016 "by mutual agreement" raises questions about the future strategic direction of Europe's largest regional airline. Mr Hammad joined in Aug-2013 and implemented a restructuring programme, returning Flybe to profit in FY2016 (March year end).
Capacity reduction during the restructuring has been followed by a period of accelerating growth. So much so that Flybe is Europe's fastest-growing airline group among the top 20 in Europe by seat numbers this winter, with an increase of 19%. CAPA has identified 45 new Flybe routes in calendar 2016 (compared with a late summer total of 165), on the majority of which Flybe has no airline competitor.
Despite low competition on its network, Flybe's FY2016 operating margin was one of the lowest among listed European airlines and coincided with weakening unit revenue. Pricing has softened further, not least due to uncertainties such as Brexit, just as Flybe's capacity growth has accelerated.
Until a replacement for Mr Hammad is found, Flybe's Chairman Simon Laffin will assume executive responsibility. Significant strategic change may be unlikely in the interim, but a key question for the next CEO will be whether to continue with such aggressive capacity growth in the face of falling fares.
European airline seat capacity growth accelerates - perhaps too quickly: Outlook for winter 2016/17
The summer 2016 season came to an end on 29-Oct-2016. Adjusting for an extra week relative to the previous summer, it produced seat growth of 6% for capacity to/from/within Europe, matching the rate of growth in summer 2015, but higher than the 10-year average rate of 4% and higher than any other summer since 2010.
Current indications from data filed with OAG are that Europe will also experience accelerating capacity growth in the winter 2016/2017 season, which runs from 30-Oct-2016 to 25-Mar-2017. Adjusting for the season being shorter by one week relative to last winter, total seat growth in Europe is set to reach 7%, compared with 6% growth in winter 2015/2016 (and 6% growth in summer 2016). This is higher than the 10-year average rate for winter of 3% and the highest winter growth since 2007/2008.
On routes to all but one region from Europe, seat growth this winter will both be faster than last winter and higher than its 10-year average. The one exception is Europe to Middle East, the fastest-growing region, where capacity growth will remain at 10%. This report presents analysis of this winter's seat growth for Europe by region and by airline group.