FlyBe in profit - and growing

Published on Sunday 19 September 2010 18:29

Jim French, the Scots boss of FlyBe, outlined ambitious expansion plans yesterday after the carrier became one of only three major European airlines to stay in the black throughout the recession.

• FlyBe has a franchise agreement with Loganair for its Scottish routes, including to the unique beach airport on Barra Picture: Allan Milligan

The group's chairman and chief executive stressed he had "no desire to be another British Airways, EasyJet or BMI" and would instead target regional players.

French, pictured below, said: "If you're making a profit during the recession, then that's the time to expand your business."

His comments came as the airline posted a 47 per cent fall in underlying pre-tax profits to 6.8 million in the year to 31 March. It joins no-frill peers EasyJet and Ryanair in staying in the black as the global economy falters.

FlyBe's narrower surplus compares with losses at other airlines, with British Airways' deficit widening to 531m in 2009-10.

Revenue at privately-owned FlyBe fell from 572.4m to 570.5m but the airline grew its "ancillary" revenues per passenger by 15.9 per cent to 11.98 by selling more pre-allocated seats and on-board meals. No final dividend was recommended.

French, who has a 7 per cent stake in the business, said he had a team "looking at acquisitions in Europe" but would not specify which countries are in its sights.

Chief commercial officer Mike Rutter told The Scotsman that the airline would target "distressed" European regional carriers.

He added: "The initial outlay to buy such airlines won't be all that high but the costs will come as we restructure them.

But we've done that before and we'll be happy to do it again."

Rutter said that Flybe's Scottish destinations - including Edinburgh, Glasgow and Inverness - stood to benefit from organic growth and acquisitions in Europe through increased leisure and business traffic."We already have people working hard to make sure that Scotland benefits from increase tourist numbers from our existing European routes," he added.

The airline is already operating Olympic Air flights in Greece, providing aircraft, cabin crew and engineering support to the carrier.

FlyBe signed a code-share agreement with Air France in July, which allows customers to book connecting flights more easily and is in discussions with Scandinavian airline Finnair to forge a similar alliance.

Rutter said FlyBe was now "easily" Scotland's biggest airline having become the largest carrier at Edinburgh airport in July, adding to its crowns at Glasgow and Inverness.

As well as operating flights from Scotland to England and European destinations, FlyBe has a franchise agreement with Paisley-based Loganair.

The contract began in October 2008 and involves Loganair's planes carrying FlyBe livery.

Rutter said: "We are genuinely proud to be flying to communities in the Highlands and islands, where we know that air travel is not a luxury but an essential part of daily life. We're working with chairman Scott Grier and his team to look at ways to grow Loganair's business."

The eruption of the Icelandic volcano in April and the resulting ash cloud cost FlyBe some 12m but Rutter said revenues in the first five months of this financial year were still up 7 per cent year-on-year despite the spring disruption.

The airline confirmed it had put in an order to purchase up to 140 aircraft, which would replace some of its current 68-strong fleet. Its 11.9m training academy business will open this year in Exeter.