Flybe on course as price cuts help to fill planes

Flybe: Fare reductions have resulted in rising passenger numbers. Picture: Stephen Mansfield

In a trading update ahead of its annual results, the Exeter-based carrier said passenger numbers had taken off in the final three months of its financial year, despite ditching routes in a bid to reduce running costs.

Although overall capacity was down 4 per cent, passenger numbers grew 6 per cent to 1.6 million in the fourth quarter and the load factor – a measure of how full planes are – improved 6 percentage points to 70 per cent.

Flybe is aiming to save £71 million next year – having trimmed £47m off its costs last year by cutting jobs and routes – and said trading during the three months to the end of March had lived up its hopes.

The airline is led by chief executive Saad Hammad, pictured below, who replaced Scot Jim French last year, and in February the firm raised £150m through a share placing, boosting its cash balances to £218m by the end of its financial year.

Yesterday’s update came as budget airline EasyJet revealed it was closing in on Irish rival Ryanair in terms of passenger numbers, with a 4.8 per cent increase to 5.1 million for March. On Thursday, Ryanair blamed the later arrival of Easter this year as it suffered a 4 per cent decline in passengers to 5.2 million last month.

Both airlines enjoyed a 1 percentage point increase in their load factor, but EasyJet’s planes were busier, with a load factor of 91.5 per cent, compared with 80 per cent at Dublin-based Ryanair.

Aer Lingus, which is almost 30 per cent owned by Ryanair, said its total passenger numbers for March were 5.6 per cent lower than a year ago at 797,000.

Flybe has been axing jobs, closing regional bases and reviewing routes under a major cost-cutting programme after slumping into the red by £23.2m in the year to March 2013 amid higher fuel costs and a declining domestic market.

It said in February that it expects fewer job losses than previously announced as plans to rid itself of unprofitable routes and surplus aircraft gained momentum.

The firm, which posts its full-year results on 11 June, expects to shed about 450 jobs, as opposed to the 500 estimated in November, with between 40 and 60 compulsory redundancies.

Flybe is refocusing on larger sites, expanding its service from Birmingham, but closing bases in Aberdeen, Inverness, Guernsey, the Isle of Man, Jersey and Newcastle, although it will continue to fly to those airports.

Summer sales were described as “positive”, with 20 per cent of its capacity for the season sold by the end of last month, up from 17 per cent at the same point a year ago.

The airline has also promised that passengers on flights that arrive more than an hour late will get a £60 voucher off their next trip.