Flybe Group Share News (FLYB)

(ShareCast News) - Low-cost airline Flybe said it was on track for its summer trading as it reported stable passenger numbers for the fourth quarter and said 2016 results are likely to be in line with market expectations.In a trading statement for the quarter ending 31 March, the company said seat capacity was increased at a temporarily lower rate of 2.4% in response to the terror attacks in Paris in November.Passenger volumes were maintained at 1.8m but the load factor - a gauge of how many seats were taken up on flights - fell to 68% from 70%.Passenger revenue, meanwhile, was in line with the previous year.Flybe said summer trading was on track, with a 17% increase in capacity versus the prior year and around 21% of capacity already sold.In light of ongoing macroeconomic uncertainty, the company has hedged both fuel oil and US dollar to 90% of 2016/17's exposure. It said the rise in the value of the dollar since the turn of the year has impacted 2016/17's operating costs by £7m.Last month, Flybe took ownership of three Q400 aircraft, previously on operating leases, for $34m (£24.2m). It said this was in line with its strategy of rebalancing aircraft fleet away from reliance on operating leases and towards outright ownership, bringing the associated margin uplift.Chief executive Saad Hammad said: "This last year has seen enormous progress at Flybe. We completed the resolution of the key legacy issues while significantly improving our service and customer offering. We are carrying more passengers across a growing route network and doing so at a lower unit cost."Against the background of the highest level of market capacity growth for six years driven by low fuel prices, we continue to be disciplined in deploying our capacity, focusing investment on routes where airport partners provide cost mitigation and those which adhere strictly to our business model. We are also continuing to reduce unit cost, which provides margin resilience, as well as reviewing our capacity growth rate beyond this summer."Cantor Fitzgerald analyst Robin Byde identified possible reasons for the sell-off."I think they've done very well on restructuring capacity and fleet but demand still just seems to be too weak on the routes that they fly," he said."You've had a number of investors decide that trading is not going to get significantly better any time soon and it's time to sell," he added.At 1058 BST, Flybe shares were down 8.9% to 58.40p.