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Flybe losses rise ahead of turnaround 21 June 2013

Flybe – the loss-making airline – has confirmed a loss before tax of £40.7 million for the 12 months ending 31 March 2013, worse than the £6.2 million loss declared for the 2011/12 period.

The carrier which today updated on the progress of its turnaround plan ‘Delivery and Future Direction’ said this was in line with the carrier’s expectations and said it has taken further steps to finance the turnaround plan.

It has now received support from 54% of shareholders to transfer £20 million of arrival and departure slots at London Gatwick airport to Easyjet.

It has also deferred the delivery of 16 Embraer E175 regional jet aircraft, to postpone the payment of £20 million in pre-delivery costs originally scheduled for winter 2013/14.

The company acknowledged that it had reached an agreement with the British Airline Pilots Association for up to a 5% reduction in salary in return for extra time off.

Flybe said the ‘disappointing’ performance for 2012/2013 which triggered the turnaround plan was the result of a further 1% decline in the airline’s core domestic market in the UK coupled with higher fuel prices and additional cost pressures.

In total, 240 people have now left the business as a result of the restructuring and reorganisation of the business . This was part of the first phase of the turnaround plan. A further 250 were transferred to other businesses as part of the Transfer of Undertakings Protection of Employment regulations (TUPE).

The company’s balance sheet now has £54.7 million in cash including ‘restricted funds’ as well as net debt of £66.3 million. This is a rise in net debt from the £29.7 million declared in last year’s results.

 

 

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