Airline Flybe has confirmed it has exceeded its ‘phase one’ target of £25m in cost-savings as part of its turnaround plan for 2013/2014 after it announced plans to cease flights from London’s Gatwick airport.
The Exeter-based airline – which earmarked around 300 jobs for redundancy in January –confirmed it was selling its 25 arrival and departure slots at Gatwick to rival Easyjet for £25m.
Flybe’s 650 pilots have also agreed to take a 5% salary reduction in return for time in lieu while the total headcount has now been reduced from 2,730 to 2,140 staff.
In addition, the company has deferred the delivery of 16 new E175 Embraer aircraft until 2017-2019 which frees up an additional £20m for the financial year 2013/2014.
Jim French, chairman and chief executive officer of Flybe, said it is now on course to deliver £30 million in cost savings during the 2013/2014 financial year.
He added: “In the past few months we have streamlined the business, reducing headcount by more than 20%. We have also made major progress in reducing the cost of our supplier base.
“I am particularly pleased that we are delivering these plans without recourse to shareholders, as a result of raising funds for restructuring through well-timed and managed asset disposals and aircraft delivery deferrals.”
Flybe UK is hoping to break even in the first year of its turnaround plan (2013/14), while Flybe Outsourcing Solutions is targeted EUR 200,00 in profit per contract per flying aircraft rising to EUR 300,000 in Year 2 and EUR 400,000 in Year 3.