Flybe warns of £4m hit from recent Beast from the East

● Carrier forced to cancel hundreds of regional flights ● But notes that turnaround plans progressing well

Regional airline Flybe is set to take a financial hit from the recent extreme weather that led to widespread transport disruption and hundreds of cancelled flights.

The carrier, which is in the midst of a turnaround under chief executive Christine Ourmieres-widener, said in a trading update that it had to cancel 994 flights in the fourth quarter due to Beast from the East.

It told investors yesterday: “As a result, we anticipate this to have an impact of around £4 million from lost revenue and additional care and assistance costs on cancelled and delayed flights.

“Coming so late in the financial year means that this added loss will be reflected in our full-year financial results.”

Despite the weather blow, the airline flagged that its turnaround efforts were beginning to pay off, with passenger revenue per seat up by 9 per cent to £50.84 in the period.

Passenger numbers rose by 3.7 per cent and early indications of summer trading are “encouraging”, the group added, with an estimated 7.5 per cent increase in passenger revenue per seat.

The firm said its strategy to reduce capacity and focus on “profitable flying” will continue into the new financial year.

Ourmieres-widener said: “The Flybe strategy as set out in our business plan to reduce the fleet size is delivering higher load factors and revenue per seat.

“The drive to reduce costs is continuing, given added impetus by the rise in fuel prices and lower value of sterling.

“Despite these headwinds, the foundations are being put in place to strengthen the business and we remain confident that our strategy will continue to improve performance as we go into the new financial year.”

In February, shares in Flybe took off after Stobart Group said it was weighing a potential approach for the Exeterbased airline. But last month Stobart confirmed that it does not intend to make a bid for the carrier after failing to agree “satisfactory terms”.

Analysts at brokerage Numis Securities, which has a “hold” recommendation on Flybe’s shares, said: “Given Flybe’s greater exposure to smaller, regional airports where the infrastructure to operate in severe weather conditions is limited, we believe the UK’S recent weather conditions have disproportionately affected Flybe.

“Importantly, this is a oneoff event, without any implications for its expected FY19 [2019 financial year] operational performance.

The drive to reduce costs remains a key focus of the group as it continues to deliver its Sustainable Business Improvement Plan set out in June 2017. Management are confident that its strategy will ‘continue to improve performance’ in the FY18.”

They added: “We now forecast FY18 revenue of £750.6 million (from £752.2m).”