Flybe warns of weakening sales
Flybe has (05-Oct-2011) warned it suffered a marked slowdown in UK domestic sales, the largest part of its business, in Sep-2011 “in line with many other UK consumer facing businesses”. Sales increased 9% in its fiscal first half, which was 1% behind expectations. The regional airline group said it remains too early to say whether the slowdown was a short-term reaction to wider economic concerns or "a longer-term market adjustment". Highlights from the update include:
- Passenger revenue up 9% (up 3% excluding impact of Apr-2010 ash cloud crisis), 1% less than forecast;
- Seats flown increased 200,000 to 6.4 million (down 1.7% excluding impact of Apr-2010 ash cloud crisis), in line with the group’s flat year-on-year capacity programme;
- “Improvements” in passenger numbers, load factor and both ticket and ancillary yields;
- Passenger revenues per seat up 6%, with services from UK regions on European city business routes performing “well”.
Flybe: "In the first half of 2011/12, despite some gloomy statistics regarding UK retail sales, we have delivered good growth in passenger numbers, load factors and yields, particularly across our UK to European network. It is also pleasing to start the roll out of our European growth strategy and we are encouraged by the positive feedback we are receiving from our new partners, Finnair, on the re-organisation and development of our joint venture, Flybe Finland. Our European Division will continue to focus on the integration which is making excellent progress and will also continue to look for low risk opportunities to expand this business. The recent slow down in sales on our UK domestic routes is obviously a development we are closely monitoring. In previous years, Flybe has demonstrated the resilience of its high frequency business model by adjusting short term capacity to meet reduced demand and being prepared to cut costs. Our management team remains acutely focussed on these areas," Jim French, chairman and CEO. Source: company statement, 05-Sep-2011. [more - original PR]