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Flybe revenue to take a hit as bad weather forces nearly 1,000 flight cancellations
Flybe said on Tuesday that a surge in flight cancellations in the fourth quarter was likely to dent revenue by around £4m, but the regional airline sounded an upbeat note on its summer outlook.
The group was forced to cancel 994 flights in the fourth quarter due to extremely poor weather in February and March, up from 372 in the same period a year ago.
During the quarter, the load factor - which gauges how full the planes are - was up 6.8 percentage points to 73.5%, which the company said was a strong performance for the winter season. Meanwhile, estimated passenger revenue per seat was 9% higher at £50.84 and passenger numbers were up 3.7%, even though capacity was reduced by 6%.
Flybe said early indications for the summer were "encouraging", with an estimated 7.5% increase in passenger revenue per seat offsetting an expected 7.9% drop in capacity. So far, it has sold 21% of its first-half capacity against 20% sold at the same time last year.
Chief executive Christine Ourmieres-Widener said: "The Flybe strategy as set out in our business plan to reduce the fleet size is delivering higher load factors and revenue per seat. The drive to reduce costs is continuing, given added impetus by the rise in fuel prices and lower value of sterling.
"Despite these headwinds, the foundations are being put in place to strengthen the business and we remain confident that our strategy will continue to improve performance as we go into the new financial year."
Numis said: "Given Flybe's greater exposure to smaller, regional airports where the infrastructure to operate in severe weather conditions is limited, we believe the UK's recent weather conditions have disproportionately affected Flybe. Importantly, this is a one-off event, without any implications for its expected FY19 operational performance."
The brokerage, which rates the stock at 'hold', now forecasts FY18 revenue of £750.6 from £752.2m, adjusted EBITDA of £39.5m from £44m and an adjusted loss before tax of £15.7m from £11.3m.
At 1010 BST, the shares were up 1.5% to 34p.