Flybe Group PLC (LON:FLYB) shares soared after the budget airline issued a rosy trading update for the first quarter, showing passenger revenue rising 11.7% to £174.0mln and advance bookings ahead of levels seen last year.
Flybe said in a statement that Q1 revenue benefited from additional routes and the timing of Easter, leading to a 7.1% rise in the number of passengers to 2.4mln from 2.3mln.
The load factor rose to 72.5% from 70.0% while passenger revenue per seat increased to £51.73 from £47.95.
The number of flight cancellations halved in the first quarter while punctuality, measured as arrivals within 15 minutes of schedule, fell to 81.0% from 82.4%.
The airline said forward sales in the second quarter as at 24th July 2017 improved as slower capacity growth continued to drive yield and revenue per seat. Passenger revenue was up 14% from the previous year while 52% of seats were sold compared with 48% in the prior year. Revenue per seat, meanwhile, was up 12%.
Flybe said: "Capacity growth as a whole for H1 is likely to be around 2%, but we are now planning for H2 capacity to reduce by around 7%, reflecting a smaller fleet and winter scheduling plans."
Flybe CEO Christine Ourmieres-Widener said the airline will focus on rebuilding unit revenues as it has greater control over capacity.
She added that: "I am very excited about developments in Scotland, with our new routes complemented by the recently announced partnership with Eastern Airways, which gives increased connectivity options for passengers, and shows our long-term commitment to Scotland."
"In the second half of 2017/18, given the planned capacity reductions, there will be an increased focus on efficiency to improve operational performance and manage unit costs."
In afternoon trading, shares in the small cap stock jumped 3.87p to 39.37p, a 10.90% increase.