Flybe to continue shrinking fleet as it moves to profitability

The fall in the pound following the Brexit vote cost Flybe around £10m

Shrink to fit: Flybe is handing back some Bombardier Q400 aircraft (Flybe)

Britain’s biggest regional airline, Flybe, is set for “sustainable profitability,” according to its chief executive.

Christine Ourmieres-Widener was announcing half-year adjusted profits before tax of £8.4m on revenue of £418m. The results cover the six months from April to September 2017.

On 18 October, Flybe issued a profits warning that cited “higher than expected” maintenance costs on its fleet of Bombardier Q400 aircraft.

Costs per seat, excluding fuel, were 10 per cent higher because of the maintenance issues as well as an “onerous IT contract provision”. Passenger numbers increased by 8.8 per cent while seat capacity was up 3 per cent, signalling a 4 per cent improvement in load factor to 76 per cent.

The average passenger paid £73, up 3 per cent on the same six months in 2016. But the fall in the value of sterling following the Brexit vote cost Flybe around £10m.

Ms Ourmieres-Widener said the airline would continue to shrink its fleet and sell a higher proportion of seats on its flights: “Load factors are expected to continue to strengthen as the fleet reduces and we anticipate that yields will stabilise,” she said.

The fleet peaked in May 2017 at 85 aircraft. Over the next three years, the number of planes will reduce by around 18 per cent to around 70 aircraft.

“We are able to focus our resources on fewer, more profitable routes,” the airline said. “Five loss making routes have already been closed. This delivers improvement in our load factors and helps to maintain yield.”

Routes from Heathrow to Aberdeen and Edinburgh, set up after Virgin Atlantic's Little Red domestic operation closed down, “continue to perform in line or ahead of our expectations”.

The number of flights arriving 15 minutes or more behind schedule has increased, from 18 per cent to 22 per cent.

“In part, this is because we have been making extra efforts to fly sectors and not cancel them, even if they run late,” said Flybe. “Poor weather and air traffic control issues have also been factors this year.”