'The bad old days are now over' as Flyglobespan returns to profit

Published on Wednesday 19 November 2008 20:49

NO-FRILLS airline Flyglobespan has staged a dramatic recovery, announcing a full-year profit – following a £13 million loss – and a further contract win in its lucrative winter plane leasing business.

The firm, which is predicting higher profits in the current year, revealed it had returned to the black in the 12 months to 31 October, producing a profit understood to be in the region of 1m.

The result was boosted by record load factors in the summer months and strong revenues from leasing out planes and crews during its quieter season.

Flyglobespan said its latest multi-million-pound deal with the Ministry of Defence for transporting troops to Qatar increased the latest full year's turnover from winter leasing to just over 40m – 60 per cent more than the previous year.

Chairman Tom Dalrymple said 80 per cent of the firm's long-haul aircraft and half its short-haul fleet were generating revenue through leasing.

He said: "We are absolutely delighted with the latest leasing contracts. These will have a hugely positive impact at a traditionally lean time and leave us much more strongly positioned as summer approaches."

The 2006-7 losses came after Flyglobespan suffered problems with planes on its Canadian routes, combined with investment in new aircraft and rising fuel prices.

But Dalrymple yesterday told The Scotsman that his firm had experienced a turnaround over the past year. He said: "In the financial year that has just ended, despite the meteoric rise and fall of the economy generally, we will be in profit. The bad old days are now over for Flyglobespan."

Although he would not give specific profit figures, Dalrymple said the profit would not be "tens of millions". He added that the current financial year was likely to generate substantially higher profits.

He said: "For us, the winter plane leasing is a very important source of income. It will make an enormous difference to us this year. For most airlines, the winter period is when you lose money. The more we can get into a position during the winter where we are generating money, the better we will be set up for the summer period."

Dalrymple said the leasing agreements also meant Flyglobespan had been able to retain all of its full-time staff over the winter period. He said: "Other carriers mothball chunks of their fleet and lay off huge numbers of staff during the winter. Our strategy means continued work for more of our employees at a time when others are making staff redundant."

In addition to the new Qatar route, the airline also has other agreements with the MoD, and rents planes to a number of other airlines.