Fool6 Oct 2017 14:06
FLYBE tipped over EZY in today's Fool :
'Making the most of a dangerous situation
Since 2011, Flybe has struggled to take off. After an ill-advised expansion drive, the company had a near-death experience, and it has taken years for management to sort out the mess. Nonetheless, now capacity has been cut and the group has a strong balance sheet, the airline is well-positioned for growth.
Passengers have responded well to the changes. For the company�s first fiscal quarter, revenue was up 11.7% year-on-year as passenger numbers rose 7.1% and the yield per seat increased 7.9% to �51.73.
One of the most attractive qualities about Flybe is that the company has no competition on more than two-thirds of its domestic routes. What�s more, the airline is a more attractive proposition than rail. For example, a flight from Cardiff to Aberdeen costs �110 and takes three hours. A similar train journey on the same day (22 November) costs over �200 and takes nine hours.
As the turnaround starts to yield results, for the fiscal year ending 31 March 2019, analysts expect the company to earn 7.2p per share. Based on this estimate, the shares could be worth as much as 87.3p, 120% above today�s price if they command the same valuation (12.3 times forward earnings) as easyJet'.