TIDMFLYB
RNS Number : 0823M
Flybe Group PLC
26 July 2017
Flybe Group plc
('Flybe' or 'the Group') 26(th) July
2017
Q1 2017/18 TRADING STATEMENT
11.7% passenger revenue growth as load factor and passenger
yield improve
With greater control over fleet capacity, the concentration on
profitable routes is beginning to show through in Flybe's
performance. In Q1, passenger revenue grew by 11.7% with seat
capacity growth slowing to 3.5%. Both load factor and passenger
yield improved, bringing an increase in revenue per seat. Q1
revenue benefited from a few additional routes including Heathrow,
as well as the timing of Easter.
The quarterly passenger revenue performance is outlined
below:
-- 11.7% growth in passenger revenue to GBP174.0m (2016/17: GBP155.8m)
-- 3.5% growth in seat capacity to 3.4 million (2016/17: 3.2 million)
-- 7.1% increase in passengers to 2.4 million (2016/17: 2.3 million)
-- 2.5 ppts improvement in load factor to 72.5% (2016/17: 70.0%)
-- 4.3% improvement in passenger yield to GBP71.33 (2016/17: GBP68.39)
-- 7.9% increase in passenger revenue per seat to GBP51.73 (2016/17: GBP47.95)
As planned, the last two leased Q400 aircraft were delivered in
the quarter with the total fleet peaking at 85 in May (including
the five ATR aircraft supporting the SAS White Label operation). As
part of the planned fleet reduction, the first of this year's six
end-of-lease Q400 handbacks is in the process of being returned to
the lessor. The commercial agreement with Stobart Air to operate
two E195 jets from London Southend commenced in May with one
aircraft in operation and the second due to start in August.
Improving operational excellence is a key pillar of the
Sustainable Business Improvement Plan outlined in June to drive
both customer satisfaction and cost efficiency. In Q1, performance
has been positive with a halving of cancellations year on year. On
time performance, measured as arrivals within 15 minutes of
schedule, fell slightly from 82.4% to 81.0% and will now be our
focus for the near future.
We expect to finalise contract negotiations for the new digital
platform in the coming month. As advised at the year-end results in
June, we anticipate a provision for IT costs of around GBP6m in the
first half of 2017/18 relating to cancellation penalties on
existing IT contracts. Once introduced, the new platform will
improve booking experience, attract new customers and enhance our
customer relationship management.
Q2 2017/18 current trading
Forward sales in Q2 as at 24(th) July 2017 improved as the
slowdown in capacity growth continued to drive yield and revenue
per seat:
-- 14% increase in passenger revenue vs. prior year
-- 2% increase in seat capacity vs. prior year
-- 4% increase in yield vs. prior year
-- 52% of seats sold vs. 48% in the prior year
-- 12% increase in revenue per seat vs. prior year
Capacity growth as a whole for H1 is likely to be around 2%, but
we are now planning for H2 capacity to reduce by around 7%,
reflecting a smaller fleet and winter scheduling plans.
Christine Ourmieres-Widener, Chief Executive Officer, said:
"I am very encouraged by my first six months as CEO at Flybe.
Both load factor and passenger yield have improved as expected, and
with the greater control we have over capacity we will focus on
rebuilding unit revenues. Alongside this, we are investing in the
future, as demonstrated by our new Heathrow flights, our commitment
to improve operational performance and deliver an enhanced customer
digital platform. I am very excited about developments in Scotland,
with our new routes complemented by the recently announced
partnership with Eastern Airways, which gives increased
connectivity options for passengers, and shows our long-term
commitment to Scotland.
There remains a lot to be done, but we have the firm foundations
needed to progress our plans for the business. In the second half
of 2017/18, given the planned capacity reductions, there will be an
increased focus on efficiency to improve operational performance
and manage unit costs."
Enquiries:
Flybe
Philip de Klerk, Chief Tel: +44 (0)20 7379
Financial Officer 5151
Maitland
Andy Donald Tel: +44 (0)20 7379
5151
Flybe UK revenue KPIs
Quarter Quarter Change
to to %
30 Jun 31 Jun
2017 2016
------------------------------- -------- -------- ---------
Seats and passengers
Scheduled seats(1) (million) 3.4 3.2 3.5
Passengers(2) (million) 2.4 2.3 7.1
Load factor(3) (%) 72.5 70.0 2.5 ppts
------------------------------- -------- -------- ---------
Revenue
Passenger revenue(4)
(GBPm) 174.0 155.8 11.7
White Label flying revenue
(GBPm) 8.9 7.8 14.1
Revenue from other activities
(GBPm) 4.7 2.9 62.1
------------------------------- -------- -------- ---------
Total Flybe UK revenue
(GBPm) 187.6 166.5 12.7
------------------------------- -------- -------- ---------
Yield
Passenger yield(5) (GBP) 71.33 68.39 4.3
------------------------------- -------- -------- ---------
Passenger revenue per
seat(6) (GBP) 51.73 47.95 7.9
------------------------------- -------- -------- ---------
Cost per seat(7) increased by 4.3% but in constant currency
improved by 0.7%. Excluding fuel, cost per seat increased 5.0% and
in constant currency increased by 1.1%.
Hedging
Flybe UK's current hedge books at 24(th) July 2017 are
summarised below
Jet fuel
-- Q2 2017/18 - 94% hedged at USD 490 per tonne
-- H2 2017/18 - 88% hedged at USD 497 per tonne
-- H1 2018/19 - 73% hedged at USD 517 per tonne
US Dollar
-- Q2 2017/18 - 94% hedged at USD 1.406
-- H2 2017/18 - 93% hedged at USD 1.412
-- H1 2018/19 - 35% hedged at USD 1.291
Carbon
-- Calendar year 2017 - 100% hedged at EUR2.59 per tonne
-- Calendar year 2018 - 0% hedged
Flybe UK's exposure to Euros has been steady but remains under
review for hedging.
END
Notes:
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation ("MAR") EU no.596/2014. Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
Forward-looking statements:
Certain information included in these statements is
forward-looking and involves risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied by the forward-looking statements.
Forward-looking statements include, without limitation,
projections relating to results of operations and financial
conditions and Flybe Group plc ("the Group") plans and objectives
for future operations, including, without limitation, discussions
of the Group's business plan, expected future revenues, financing
plans and expected expenditures. All forward-looking statements in
this report are based upon information known to the Group on the
date of this Trading Statement. The Group undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
It is not reasonably possible to itemise all of the many factors
and specific events that could cause the Group's forward-looking
statements to be incorrect or that could otherwise have a material
adverse effect on the future operations or results of the business.
Further information on the primary risks of the business and the
risk management process of the Group is given in the Annual Report
and Accounts 2016/17. This document is available from
http://www.flybe.com/corporate/investors.
1 Seat capacity represents the average number of seats per
aircraft multiplied by the number of scheduled sectors flown.
2 Passengers are customers with an issued ticket where the
ticket has charged a fare and/or a passenger surcharge and tax (if
applicable).
3 Load factor is sold seats (Flybe ticketed passengers on either
Flybe operated scheduled services or hard block routes operated by
the codeshare partner) divided by scheduled available seats (seats
available for passenger occupancy on scheduled services).
4 Passenger revenue represents total ticket and ancillary
revenue (including unflown APD) less refunds plus revenue from hard
block codeshare arrangements.
5 Passenger yield represents total passenger revenue (as defined
in note 4) per passenger after the deduction of government taxes
and levies.
6 Passenger revenue per seat is passenger revenue generated
divided by scheduled available seats flown.
7 Cost per seat includes all costs related to White Label
operations (aircraft ownership cost, crew, maintenance, insurance
and overheads), but not the flown seats associated with White Label
operations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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