Regional airline Flybe yesterday revealed that its half-year profits nearly halved after it was hit by higher-than-expected aircraft maintenance and IT costs.
The carrier, which warned over interim earnings last month, posted underlying pre-tax profits of £8.4 million for the six months to the end of September,downfrom£15.9m a year earlier.
However, the result came in towards the top end of the range given in the group’s October profit alert, when it had said profits could fall by up to 69 per cent.
The airline’s results were knocked by a drive to improve the reliability of its planes, in particular the Bombardier Q400 turboprop, as well as additional IT costs of £6m linked to the development of a new digital platform, while the weak pound also took its toll.
Chief executive Christine Ourmieres-widener said: “While half-year profits are lower than last year, due to the one-off IT contract costs, higher maintenance expenses and the impact of the fall in
0 Flybe boss Christine Ourmieres-widener pictured at Edinburgh Airport
GERALD KHOO, ANALYST the value of sterling, I am confident that we are on a clear path to sustainable profitability through the investments and improvements we are making at Flybe.”
She added the group would focus in its second half on improving its cost base and reliability performance, as well as ploughing on with investment in its new online system.
But Flybe, which carries some 8.8 million passengers across 199 scheduled routes, warned the European airline market remains “challenging”. Half-year figures showed it has slowed its UK seat capacity, with growth pairing back to 3 per cent, while passenger numbers rose 8.8 per cent to 5.2 million.
Its load factor – a key measure of how well it fills its planes – improved as a result, to 76 per cent from 72 per cent a year earlier.
The group said Scotland remains a “core part of our network”, in the wake of former partner, Glasgow-based Loganair, going its own way. Loganair
“A number of cost headwinds impacted the bottom line, and while some will not recur, we believe caution is warranted.”