As FlyBe (LON:FLYB) has already flagged that its results will be in line with expectations, investors attentions will be more closely focussed on the budget airline’s outlook.
Lower fuel costs are plainly positive for the aviation industry, there’s much more to consider in what remains to be a difficult segment of the market – and that’s before mulling the possible impact of a Brexit.
“Market conditions continue to be challenging with travel patterns disrupted by geopolitical events, as other industry players such as Ryanair, and easyJet have pointed out,” Numis analyst Wyn Ellis said in a recent note.
“We estimate that routes to and from France accounts for c.10% of Flybe’s seat capacity and the recent industrial action by air traffic controllers will, we believe, have aggravated an already difficult situation.”
Ellis notes, however, that Flybe’s management had been quick to respond to circumstances.
The analyst added: “Flybe has made encouraging progress with its Turnaround Programme over the last couple of years as management has resolved legacy issues, revitalised the brand and the route network, and exerted a firmer grip over costs, capacity and cash.
“The market is tough, but we believe that the business will continue to demonstrate progress.”
Numis expects Flybe to report an adjusted pre-tax profit of just £3mln, but, the broker highlights that a return to profitability is an important milestone for the recovering airline.
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