TUR­BU­LENT TIMES

The Scotsman - - Business -

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.”

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