Flybe cost cuts ‘progressing well’, says regional airline

Flybe cost cuts ‘progressing well’, says regional airline

A detailed update of Flybe’s cost-cutting turnaround efforts and a strategic plan for the future will be announced next month.

Confirmation came in a trading statement this morning ahead of the regional carrier announcing results for the year to March 31 in June.

Group revenue for the year will be in line with 2011/12, at the lower end of previous guidance, while costs are expected to increase by around 2.5%.

“Underlying loss before tax for 2012/13 is therefore expected to be within but at the lower end of previous guidance,” the airline said.

The group said “significant actions” had taken place to restore profitability since announcing its turnaround plan in January.

“Phase 1 of the cost reduction plan is progressing well and is expected to deliver cost savings ahead of the £25 million already communicated for the year to March 2014,” Flybe said.

“The Flybe Group has been restructured to create a leaner more focused business, with the number of divisions reduced to two, Flybe UK and Flybe Outsourcing Solutions.

“Non-underlying restructuring costs in 2012/13 for Phase 1 are expected to be in line with previous guidance at between £10 million to £12 million.”

Flybe is advancing a second phase to realise further revenue and cost benefits from 2013/14 onwards.

Revenue under management, including Flybe’s joint venture with Finnair Flybe Finland, will show year-on-year growth of around 15% due to a rise in contract flying operations.

Total cash at March 31 was ahead of previous expectations at £54.4 million.

Forward ticket sales revenue for Flybe UK for the 2013 summer flying programme shows an increase of 2% over the same time last year, driven by growth in passenger numbers, against capacity growth of less than 1%.


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