British carrier Flybe posts first pre-tax profit in four years

Airline began a turnaround programme in January, trimming costs by giving up airport slots

British carrier Flybe posted its first pre-tax profit in four years. Photo: Bloomberg

British carrier Flybe posted its first pre-tax profit in four years. Photo: Bloomberg

Wed, Jun 11, 2014, 08:36

British carrier Flybe posted its first pre-tax profit in four years, beating market estimates, as cost-cutting measures it undertook paid off.

The company also made a good start to full-year 2015 and was trading in line with its expectations, chief executive Saad Hammad said in a statement.

Profits at a number of European airlines have been under pressure over the past few years as cash-strapped customers sparingly took flights in the years post the economic meltdown of 2008, adding to the burden of soaring fuel costs and higher airport charges.

Flybe kick-started a turnaround programme last January, trimming costs by giving up airport slots, cutting jobs, exiting unprofitable flight routes and grounding surplus fleet.

These measures helped the budget carrier swing to a pre-tax profit of £8.1 million pounds for the year ended March 31. Its books reflected a pre-tax loss of £41.1 million a year earlier.

Revenue jumped 1 percent to £620.5 million.

“The return to profitability is a great step forward. This enables us to start implementing our twin-engine strategy of growing our UK branded business and our white label operations across Europe,” Mr Hammad said on Wednesday.

Although Flybe has issued a string of profit warnings since listing on the London Stock Exchange in 2010, a recovery in the UK economy could buoy prospects for the carrier, whose interests are split between business and leisure customers.

Most commentators are expecting 2014 to see growth in the range of 2.4 per cent to 3.5 per cent, chairman Simon Laffin said.

Reuters