Flybe stated (16-Sep-2013) the current divisional structure, comprising Flybe UK and Flybe Outsourcing Solutions, will be disbanded and all operations integrated into a single operating unit. The carrier noted that in its last interim management statement, issued on 08-Aug-2013, it confirmed that Saad Hammad, its new CEO, had commenced a full review of the Group's operations and would report in due course on the future strategic development and direction of the business. Whilst the review is on-going, the company noted that "it is already apparent that the future direction of the business will be best advanced through a unified and lower cost operational approach". As a result of this re-organisation, Andrew Strong, MD of Flybe UK, Mike Rutter, MD of Flybe Outsourcing Solutions and Mark Chown, director of Corporate Strategy, left their positions with Flybe on 13-Sep-2013. As previously announced, Paul Simmons will join Flybe as Chief Commercial Officer with effect from 28-Oct-2013. Flybe also confirmed that with immediate effect Matt Bennett currently Director of Internal Audit and Risk will, in addition to his current duties, act as Director of Special Projects, while John Palmer currently Director of Aircraft Maintenance will become (interim) director of Operations whilst a search is conducted for this role. Saad Hammad commented: "It has quickly become clear to me that Flybe's prospects will be significantly enhanced by disbanding the existing divisional structure and integrating all operations into a single, simpler and lower cost operating unit. Today's announcement facilitates that move and will form an important part of the strategic review of the business which I expect to conclude in November. I look forward to sharing its full conclusions." [more - original PR]
Flybe reveals simplified business structure, three directs leave carrier
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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.