regional airline Flybe returned to profit last year following a major restructuring of the business.
The company, which shed more than 1,000 jobs and axed some routes, reported record passenger numbers over the past year and today unveils a new service from Inverness to Dublin.
Paul Simmons, chief commercial officer, described the figures as marking “the rebirth of Flybe”. He said: “We have turned the corner. We are not saying this is the end, but we are back into moderate growth.”
The airline turned a £41.1 million loss into an £8.1m pre-tax profit after reducing costs by 3.3 per cent. Group revenue rose by 1 per cent to £620.5m. The improvement followed the implementation of a review of the business in January last year, which led to the sale of 25 pairs of slots at Gatwick and the switch of some services to London City.
By March this year, the company had reduced the number of UK aircraft bases from 13 to seven – Belfast, Birmingham, Edinburgh, Exeter, Glasgow, Manchester and Southampton – to reduce costs and deliver improved operational efficiencies.
The company raised its load factor – flying more passengers while reducing the number of seats.
Seven million passengers use Flybe via 35 UK airports and, despite the turnaround in its performance, chairman Simon Laffin used the results to take another swipe at air passenger duty, that is payable on flights taking off in Britain, which impacts especially on an airline mainly focused on domestic travel.
“It remains a source of amazement that the government persists with the arbitrary and discriminatory application of air passenger duty, where a typical domestic flight can be charged five times the tax per mile of a long-haul one,” he said.
“This is exacerbated when a return international flight suffers this charge once, but a domestic one is taxed twice. Yet in the last Budget, the government actually reduced long-haul APD rates by £1 billion, while informing Flybe that it could not afford to reduce domestic rates.”
Last November Laffin replaced Scots-born Jim French, who was also chief executive and in March this year the company raised £155.7m of new equity to strengthen its balance sheet and fund growth in new routes and bases, further efficiency gains and IT investment.
The firm is also looking to expand its “white label” business – operating planes for other carriers such as Finnair. Stobart Air joined Loganair as a franchise partner.