Tag Archives: British European 2nd

Flybe to cut six bases and 500 jobs

Flybe (Exeter) will close six bases and eliminate 500 positions despite a recent profit announcement. The bases to be closed are Aberdeen, Guernsey, Inverness, Isle of Man, Jersey and Newcastle.

Read the full report from the BBC: CLICK HERE

Copyright Photo: Keith Burton/AirlinersGallery.com. Bombardier DHC-8-402 (Q400) G-KKEV (msn 4201) completes its final approach into Gatwick Airport near London.

Flybe: AG Slide Show

 

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Flybe to cut another 500 jobs as it becomes profitable again in the first half

Flybe (Exeter) plans to cut another 500 jobs after it posted its first half-year profit in two years.

Read the full report from Reuters: CLICK HERE

The company issued this financial statement:

Results for the six months to September 30, 2013:

Flybe announces a significantly improved financial performance under its new management team.  In addition, a new phase of efficiency improvements announced today will secure a strong base for future growth.

Key financial highlights
      H1 2013/14£m          H1 2012/13£m               Change%
Total revenue under management * 477.3 396.3 20.4
Less: joint venture revenue (126.2) (55.5) 127.4
Group revenue 351.1 340.8 3.0
Adjusted profit/(loss) before tax, restructuring and surplus capacity costs and revaluation on USD aircraft loans ** + 12.2 (2.3)                     N/M
Adjusted profit/(loss) before tax and restructuring *** + 17.1 (1.6)                     N/M
Profit/(loss) before tax + 13.8 (1.6)                     N/M
Profit/(loss) after tax + 13.6 (1.6)                     N/M

*   Includes Flybe’s joint venture, Flybe Finland.

** Adjusted profit/(loss) before tax, restructuring and surplus capacity costs and revaluation on USD aircraft loans defined as profit/(loss) before tax, restructuring and surplus capacity costs of £4.1m (2012/13: £nil) and revaluation gains on USD aircraft loans of £5.7m (2012/13: £0.7m).  Surplus capacity costs represent the costs incurred in H1 2013/14 relating to capacity that is considered by management to be surplus as a result of the restructuring decisions.

***      Adjusted profit/(loss) before tax and restructuring defined as profit/(loss) before tax and restructuring costs of £3.3m (2012/13: £nil).

+   H1 2012/13 has been restated for the impact of adopting the revised requirements of IAS 19 Employee Benefits as detailed further in Note 2 to the condensed financial statements. The replacement of the interest cost and expected return on plan assets with a new interest charge on the net defined benefit liability led to a £0.3m increase in the reported loss for that period.

Results summary

1. First two phases of the Turnaround Plan on track to deliver savings of £40m this year and £45m in 2014/15.

2. A 20.4% increase to £477.3m (H1 2012/13: £396.3m) in revenue under management (including Flybe Finland, the joint venture with Finnair) largely driven by increased contract flying activity in Finland.

3. A 3.0% increase in group revenue to £351.1m.

4. A £13.8m profit before tax (H1 2012/13: loss of £1.6m).

5. A £10.5m operating cash inflow before increase in restricted cash and restructuring costs (H1 2012/13: £1.6m)

Operational highlights (H1 2013/14)

UK Airline:

–    6.2 million scheduled seats flown, in line with last year.

–    5.6% increase in passengers to 4.3 million.

–    3.6ppts increase in load factor to 68.6%.

–    0.9% increase in passenger revenue per scheduled seat to £50.35 (H1 2012/13: £49.92).

–    1.3% increase in total revenues to £328.2m.

–    1.3% decrease in costs per seat to £51.30.  On a constant currency and fuel price basis, costs per seat decreased by 3.1%.

–    4.7% increase in UK regional sector share for the Flybe brand to 55.1%.

Flybe Finland:

–    26.4% of Flybe’s revenue under management (H1 2013/14: £126.2m; H1 2012/13: £55.5m).

–    £110.6m contract flying revenue (H1 2012/13: £36.7m)

–    84.6% increase to 2.4 million in total seats flown, of which white label flying totalled 2.0 million (H1 2012/13: 0.8 million).

Turnaround update

Flybe aims to become the best local airline in Europe delivering unrivalled regional connectivity.

Flybe will have two engines of growth:

A regional branded airline giving a nimble and customer-friendly, scheduled service for both business and families.  This brings people together within a country and connects people in the regions to international carriers at metropolitan airports.

A regional white label model where Flybe will become the leading regional provider for mainstream European airlines.

The already announced Phase 1 and 2 cost savings are being successfully implemented.

Major management and organizational change: new Chairman and Chief Executive Officer have been appointed.  Senior executive appointments well advanced, including a new Chief Commercial Officer already in place.

Flybe’s operations have been reorganized into a single management structure.

An Immediate Action plan is being announced today and is already being implemented with three elements:

1.   Optimise configuration: rationalise route network, review fleet mix, remove surplus capacity and improve aircraft and crew utilisation.

2.   Reduce costs further: all aspects of the business are being reviewed to drive further savings.

3.   Improve commercialisation: optimise pricing and revenue management, refocus network development, strengthen route management, step change marketing impact and develop trading partnerships.

This will deliver further benefit of £7m this year and £26m next year with around 500 proposed redundancies and estimated one-off and surplus capacity costs of £14m this year plus a further £27m in 2014/15.

Finnair JV is now profitable; further improvements are being targeted by enhancing operational delivery, reducing scheduled risk flying losses and embedding ‘lean manufacturing’ techniques.

Update: According to Reuters, majority shareholder Rosedale Aviation Holdings has sold its entire 48.1 percent stake in the airline to institutional investors.

Read the full report: CLICK HERE

Copyright Photo: Antony J. Best/AirlinersGallery.com. Embraer ERJ 190-200LR (ERJ 195) G-FBEB (msn 19000057) lands at Southampton.

Flybe: AG Slide Show

Flybe attempts to turn around the company after losing $63.2 million in its fiscal year

Flybe (Exeter) is struggling to turn things around financially after reporting a loss of $63.2 million in the past fiscal year. The past year, according to the carrier, has been the most challenging year in its 10-year history. A new CEO, former easyJet executive Saad Hammad, is now closely looking at the company in great detail and bringing in new people to fill resignations.

According to its annual report, Flybe has removed 13 aircraft from the fleet and deferred another 16 aircraft. 75 percent of the fleet is now deployed on lower-risk contract flying, especially at Flybe Finland. The company is targeting a goal of over $77 million in long-term yearly cost reductions.

Read the full report: CLICK HERE

Copyright Photo: Ton Jochems/AirlinersGallery.com. Embraer ERJ 170-200STD (ERJ 175) G-FBJC (msn 17000328) taxies to the runway at Amsterdam.

Flybe: AG Slide Show

Flybe logo-1

Current routes from Southampton:

Flybe SOU 8:2013 Route Map

EasyJet to acquire 25 pairs of London Gatwick slots from Flybe

EasyJet (UK) (easyJet.com) (London-Luton) has announced and confirmed it plans to acquire 25 pairs of arrival and departure slots London’s Gatwick Airport from Flybe (Exeter) for £20 million ($25.7 million). The company issued this statement:

EasyJet plc can confirm it has completed an agreement with Flybe Group plc to acquire 25 pairs of arrival and departure slots at Gatwick airport for a total consideration of £20 million. The acquisition is subject to the approval of Flybe’s shareholders.

The slots will transfer from summer 2014 and will allow easyJet to provide additional frequencies on popular existing routes from Gatwick as well as add new destinations across the UK and Europe.

In return, Flybe issued this statement:

Flybe confirmed to the London Stock Exchange today at 0700 that it has sold its arrival and departure slots at London Gatwick airport, thus bringing to an end Flybe’s 22 year record of providing high-frequency air services from the UK regions to the airport. Flybe will continue to fly all its routes until the end of March 2014. The slots have been sold to EasyJet for a cash sum of £20 million.

The decision is as a result of the pricing regime applied by the airport’s owners to the operators of smaller, regional aircraft which, in Flybe’s case, has resulted in a 102% rise over the last five years. In a well-publicised, lengthy and expensive complaint, the airline used the Airports Act 1986 to argue to the Civil Aviation Authority (CAA) in 2010 that Gatwick was acting in an anti-competitive and discriminatory manner. Despite support from other airlines, communities and governments around the British Isles, the fact that Flybe operates more UK domestic flights than any other airline and has won the airport’s Gold Award for punctuality in every quarter since its introduction in 2009, the CAA ruled in September 2012 that Gatwick was within its rights to raise their landing fees for smaller aircraft, thus paving the way for today’s regrettable announcement.

Flybe will continue to operate as normal all its seven domestic Gatwick routes – from Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay – until Saturday March 29, 2014, with no changes to pricing, frequency or timings. It also confirmed that there will be no impact upon any other route currently operated from those seven airports and that the funds generated by the sale of the slots will be re-invested in the remaining 159 Flybe routes.

Separate to this announcement, Flybe today updated the London Stock Exchange on the significant positive progress it has made in its plan to return Flybe UK, its UK based scheduled airline, to profitability. Highlights included surpassing its target savings of £25m, with £30m of annual cost savings being delivered for year 2013/14 onwards, and the deal agreed in principle with BALPA (British Airlines Pilots Association) for a 5% reduction in salary in return for extra time off.

Top Copyright Photo: Antony J. Best. EasyJet’s Airbus A320-214 G-EZTD (msn 3909) holds short of the runway ready for departure from London (Gatwick).

EasyJet (UK): AG Slide Show

Flybe: AG Slide Show

Bottom Copyright Photo: Keith Burton. Flybe’s Bombardier DHC-8-402 (Q400) G-JEDW (msn 4093) arrives at Gatwick Airport.

Flybe logo

Flybe LGW Route Map: Flybe flies to mainly UK domestic destinations from LGW:

Flybe LGW 5:2013 Route Map

BBC: Flybe is in discussions with EasyJet to sell its 25 slots at London Gatwick

Flybe (Exeter) is reportedly in discussions with EasyJet (easyJet.com) (London-Luton) and others to possibly acquire its 25 landing and takeoff slots at London (Gatwick) according to this report by the BBC. Flybe has been losing money and is currently cutting costs and selling some of its assets.

Read the full report: CLICK HERE

Copyright Photo: Terry Wade/AirlinersGallery.com. Bombardier DHC-8-402 (Q400) G-JEDP (msn 4085) in the unique “Low Cost, but not any cost” color scheme approaches the runway at London (Gatwick).

Flybe: AG Slide Show

Flybe announces a two-year plan to return to profitability, 300 jobs may get axed

Flybe (Exter) today made a major announcement for a two-year plan to return the airline to profitability. The reorganization may lead to a loss of 300 jobs. Here is the full announcement:

  • As part of this announcement Flybe confirmed:
    • Medium term operational profit targets for the Group.
    • A revised strategy to focus on two key sectors of the market – its UK scheduled services business, and the growing European contract flying market.
    • Confirmation that there would be no change to its current route network, and that consumers will still enjoy the same choice of routes and airports.
    • A cost reduction plan for its UK business and associated support activities which targets cost reductions both internally and externally.
    • As part of the proposed cost reduction plan for the UK business, it is expected c300 roles will be made redundant.
    • The total annualised benefit of the cost reduction plan will reach £35m.
    • A review of the potential outsourcing of various support functions.
    • The establishment of a new Flybe Outsourcing Solutions business bringing together its contract flying, maintenance and training divisions across Europe into one customer offering.

A summary of the announcement is provided at the end of this release.

Effect on UK employed Staff

As a result of the cost reduction plan announced today, Flybe UK has commenced the consultation process which may lead to circa 300 proposed redundancies.  This would equate to approximately 10% of its current UK based employees.

It is expected that the majority of the proposed redundancies will, following consultation, come from Flybe’s Exeter HQ, Manchester and Newcastle.

Commenting on the plan, Flybe’s Chief Executive Jim French said: “Today’s restructuring plan for the airline has clear, two year profit targets which we believe are deliverable and realistic. A new, slimline business model for UK scheduled services underpins a turnaround which I expect will deliver a £3.00 per seat profit target in the medium term. Today’s announcement of a turnaround strategy for the UK business is a clear indication that Flybe has a plan not only to address the challenges we face, but also one to exploit the opportunities available, particularly in Europe.

“It is a matter of great regret that many valued and hard-working colleagues may leave the organisation and it was a decision I and the Board have not taken lightly ; it’s one we have tried to avoid and it is the first time in almost 30 years of business that we have had to take such action. However, faced with the brutal impact of a 160% rise in Air Passenger Duty (APD) over the past six years and the consequent 20% decline in domestic traffic over the same period, we have to recalibrate the business. There is no escape from the £68M per annum APD tax burden which Flybe has to pay as a result of increases successive governments have levied on the industry. Flybe now pays more than 18% of our ticket revenues to the government in APD, whilst other UK based carriers who operate a greater proportion of their business outside of the UK pay less than 6%.

Copyright Photo: Paul Denton. Embraer ERJ 190-200LR (ERJ 195) G-FBEL (msn 19000184) arrives at Geneva.

Flybe: AG Slide Show

Flybe logo-1

Route Map (routes from Southampton):

Please click on the map for the full-size view.

Please click on the map for the full-size view.

Flybe drops to a $10 million pre-tax fiscal year loss, ending on March 31

Flybe (flybe.com) (Exeter) swung into the red with a pre-tax loss of $10 million for its fiscal year ending on March 31.

The company issued the following report: CLICK HERE

Copyright Photo: Rob Skinkis.

Flybe: 

Flybe routes from Southampton:

Please click on the map to expand.