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Flybe shares plummet as airline guides to wider full-year loss

Published: 09:23 17 Oct 2018 BST

flybe plane
Flybe reckons this year’s costs are almost £30mln more than the last time around

Flybe Group PLC (LON:FLYB) has warned slowing demand for its domestic and near-continent flights will dent full-year earnings, sending shares in the budget airline nosediving.

Despite an encouraging first-half performance which saw average load factor and revenue per seat climb, the company said it had been struggling to fill its planes in recent weeks, a trend it expects to continue throughout the rest of the second half.

READ: Flybe highlights revenue growth, but can’t convert into profits

This, coupled with higher fuel prices and currency headwinds, means this year’s loss will be around £12mln (2017: loss of £19.2mln), although that figure is flattered by a one-off £10mln benefit from an onerous lease provision release.

“We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market,” said chief executive Christine Ourmières-Widener.

“We are reviewing further capacity and cost-saving measures while continuing to focus on delivering our Sustainable Business Improvement Plan.”

She added: “Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs.”

City broker Liberum chopped its forecasts and price target, which moved to 33p from 43p, although it kept its ‘hold’ recommendation in place.

Analysts said: “The opportunities for self-help improvements remain, but they are being more than offset by the challenging external environment.”

Shares dived 35.5% to 20.8p in mid-morning trade on Wednesday.

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