Flybe for sale after warning over profits
CARDIFF Airport’s biggest airline operator, Flybe, has been put up for sale just weeks after issuing a profits warning to the City.
The Exeter-based airline, whose routes out of Cardiff Airport carry several hundred thousand passengers a year, has confirmed it is in talks with a number of “strategic operators” about a potential sale and has hired Evercore as adviser to help with the review and sale process.
The London Stock Market listed carrier said it is also looking at cutting further costs and flight capacity as it battles challenging conditions in the airline industry.
It comes weeks after Flybe warned over profits following falling demand and a £29m hit from rising fuel costs and the weak pound.
The alert sent shares tumbling by more than a third on the day and nearly 75% has been wiped off its stock market value since December.
Stobart Group walked away from a bid for Flybe in March after the two firms failed to agree terms.
But Stobart, which already has a franchise agreement with Flybe, could reportedly come back into the frame.
The airline struck a 10-year deal with Welsh Government-owned Cardiff Airport back in 2015, which enabled it to bring back into operation a number of leased planes that were previously deemed not viable to fly commercially.
In a statement Cardiff Airport, which last year served just over 1.4 million inbound and outbound passengers, said: “Cardiff Airport works with a number of airlines to offer customers a wealth of destinations that are conveniently timed and competitively priced.
“We will continue to work closely with Flybe, with all flights to and from Cardiff Airport operating as normal.”
Flybe’s most popular routes out of Cardiff are its scheduled services to Dublin, Edinburgh, Paris and Belfast.
Flybe has 78 planes and around eight million passengers a year.
In half-year results Flybe saw costcutting help lift underlying pre-tax profits to £9.9m from £9.2m a year earlier.
Statutory pre-tax profits for the six months to September 30 more than halved to £7.4m from £16.1m a year earlier.
It saw group revenues fall 10% or 2.4% on an underlying basis to £409.2m after it cut capacity by 9%.
Passenger numbers edged 0.6% higher to 5.2 million.
Flybe chief executive Christine Ourmieres-Widener said the group continued to see improvements in the third quarter and added that cost savings had already helped to drive progress in boosting profits.
But she added: “There has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs.
“We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings.”