flybe announced plans to suspend summer Manchester-Guernsey service after Guernsey’s Commerce and Employment Department said it was reviewing all air transport licences (BBC News, 09-Mar-2011). flybe, which has operates services to the island for 20 years, said it was “bemused” by the department’s decision and questioned why it hasn’t followed “the rest of Europe in operating an open skies policy". flybe said it would appeal against the suspension, which it believes was taken “purely and simply to protect the states' very own loss-making airline, Aurigny.”
flybe's Guernsey to Manchester route suspended
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Flybe: back in profit, but still one of Europe's least profitable listed airlines
Flybe returned to profit in FY2016 – according to its latest definition of adjusted pre-tax profit, this was its first positive result since before its stock market flotation in 2010. Quibbles over profit definitions aside, it is apparent that Flybe's restructuring under CEO Saad Hammad since 2013 is continuing to make progress. Nevertheless, with an operating profit margin of just 1.4%, Flybe was one of the least profitable listed European airlines in 2015 (or nearest financial year).
Flybe is now into what Mr Hammad calls the 'Profitable Growth' phase of its turnaround. In FY2016 it returned to capacity and revenue growth after declines in the previous year. In FY2017 it is accelerating its capacity growth at a time when market conditions are producing very soft yields, but Flybe is determined to maintain cost discipline.
Of course, the achievement of profitability is only the first step in profitable growth. FY2016 will benefit from fuel cost tailwinds and this should help it to take the next step – even if it faces unit revenue headwinds.
Air France-KLM: long haul low cost airline could be part of new CEO's vision as French Blue enters
Air France-KLM chairman and CEO, Jean-Marc Janaillac, who took charge in Jul-2016, has talked about the possibility of launching long haul low cost operations (Bloomberg/luchtvaartnieuws.nl, 20-Sep-2016).
If Air France-KLM were to enter this segment it would be the second of Europe's big three legacy airline groups to do so, after the Lufthansa Group. Ironically, there is no long haul low cost competition to Lufthansa in Germany. By contrast, IAG faces more such competitors in the UK than either of its two major rival groups in their largest home market, but currently has no plan for such an operator.
Air France-KLM management told analysts on a conference call in May-2016 that it was sceptical about the sustainability of year-round profits for long haul low cost. However, new competition has prompted Mr Janaillac to look more closely at this market segment. Since Jul-2016 Norwegian has commenced trans-Atlantic long haul operations from Paris CDG. In addition, since Sep-2016, the new-start long haul LCC French Blue now flies on routes to the Caribbean. Mr Janaillac is expected to report on his strategic vision for Air France-KLM in early Nov-2016. Labour relations will be crucial to the group's development – not least in the area of long haul low cost.