Flybe looks to Europe as it posts £1.3m half-year losses
Flybe chief executive Jim French has played down media reports of possible job losses, after the most challenging conditions in its 10-year history sent the Exeter-based airline into the red.
Flybe posted pre-tax losses of £1.3 million in the six months to September 30 against profits of £14.3 million a year earlier, after being hit by rising fuel costs, a fall in UK passenger numbers and Air Passenger Duty levels it says are impacting "disproportionately" upon it, compared to competitors with significant operations outside of the UK.
Mr French said: "While no reasonable employer would rule anything in or out, at the moment there are no plans for job losses."
The airline, which employs 3,000 staff in the UK, has outlined plans to cut costs within its business targeting an annual saving of £2 per seat, saying there was "little sign of recovery" in the UK domestic market.
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The group, which maintained its 29% share of the UK domestic market, saw UK passenger numbers fall 3.6% to 4 million in the half-year, while its fuel costs leapt by 22.7% to £68.6 million – the equivalent of £8.73 to £11.06 per seat. It said that domestic demand was being stifled by air passenger duty hikes, which have risen by 160% since 2007.
Mr French said that the airline's increasing strength in Europe would support both new overseas business growth to offset the UK passenger downturn, while also giving Flybe greater leverage when negotiating rates with UK airports as it expands it working relationship with European-based aviation hubs.
The airline has seen a 7% year-on-year increase in people travelling between destinations outside of the UK during its first half-year.
Flybe formed a joint venture with Finnair to establish Flybe Finland last year, which has grown to become the biggest domestic carrier in Finland and generated £55.5 million in the first half of this financial year.
The group said that it was continuing to explore further selective joint ventures and code shares that it says will offer the fastest and most viable route to profitability in the regional airline sector within Europe.
Flybe UK revenues largely held firm at £328.5 million in the first half and the group said forward sales for winter were ahead by around 2.5% year-on-year in the UK, after cutting capacity to match lower levels of demand.
But it said the removal of debit card fees as directed by the Office of Fair Trading earlier this year had presented a considerable extra financial burden to the airline and expressed disappointment that rival airlines continued to apply additional administration charges not included in their headline fares, which it says is creating an "unfair" trading and pricing environment.