Flybe warns of profit hit from IT systems upgrade

Regional airline Flybe said plans to overhaul its IT systems will hit profits as it grapples with slowing demand and a spate of cancelled flights.

Flybe is counting the cost of an IT overhaul. Picture: Lisa Ferguson

The firm said profits would be £5 million to £10m lower in the current financial year following a major systems upgrade designed to bolster online sales and improve customer experience.

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Updating on its performance, it said passenger revenue for the fourth quarter rose 9.8 per cent, although this was down from 13.5 per cent in the quarter before.

However, passenger yield – a measure of passenger revenue without tax and levies – lifted by 2.9 per cent over the period, up from 2.8 per cent in the third quarter.

The results came as it outlined the litany of problems facing the firm, including weaker demand, price competition from rival airlines and train operators, flight cancellations caused by the weather and the impact of industrial action by French air traffic controllers.

In response, the airline said it had moved to drive down costs while reducing its flight capacity.

Chief executive Christine Ourmières-Widener said: “I continue to be very excited about the opportunities in Flybe, especially as we are now able for the first time to take control of our fleet size to reduce overcapacity.

“Flybe is increasingly a digitally enabled business, with 80 per cent of bookings already being made via our website. To seize this opportunity, we must first rebuild some of our core systems and this is now starting.

“We shall continue to reduce costs, work with our partners to improve efficiency and stop unprofitable flying.”