31 Jan 2018 07:00
Flybe Group plc
('Flybe' or 'the Group') | 31st January 2018 |
Q3 2017/18 TRADING STATEMENT
Capacity discipline continues to bear fruit as load factor and revenue improve
Our ability to now reduce our aircraft fleet and to optimise our route network continues to benefit Flybe's performance. In Q3 load factors improved by 8.6 ppts and passenger revenue grew by 8.5%. We reduced seat capacity by 4.2%, resulting in revenue per seat rising by 13.3%.
The quarterly passenger revenue performance is outlined below:
· 8.5% growth in passenger revenue to £158.8m (2016/17: £146.3m)
· 4.2% reduction in seat capacity to 3.0 million (2016/17: 3.1 million)
· 8.1% increase in passengers to 2.3 million (2016/17: 2.1 million)
· 8.6ppts improvement in load factor to 75.8% (2016/17: 67.2%)
· 0.4% improvement in passenger yield to £69.81 (2016/17: £69.53)
· 13.3% increase in passenger revenue per seat to £52.92 (2016/17: £46.72)
As planned, the first four of this year's six end-of-lease Q400 handbacks have been returned to the lessor with the next two handbacks scheduled for return before the end of March. The commercial agreement with Stobart Air to operate two E195 jets under a dry lease arrangement from London Southend is now in operation.
The focus on improving operational excellence to drive both customer satisfaction and cost efficiency has continued with encouraging results: Q3 technical despatch reliability ('TDR') improved from 99.0% to 99.2%; and in January 2018 Flybe was again recognised as the most punctual UK-based airline by 'Which?' based on punctuality statistics gathered by the Civil Aviation Authority ('CAA').
Reducing costs remains a key focus for the business and the need to balance improved reliability with higher maintenance costs has been reviewed. Maintenance costs have increased, but the rate has slowed as the business has achieved greater control over reliability.
The implementation of the new digital platform is progressing to plan and is expected to commence operation in H2 2018/19. Once introduced, the new platform will improve the booking experience, attract new customers and enhance our customer relationship management.
Q4 2017/18 current trading
Forward sales in Q4 as at 28th January 2018 show the following position:
· 2% decrease in seat capacity vs. prior year
· 43% of seats sold vs. 41% in the prior year
· 5% increase in passenger revenue vs. prior year
For H2 as a whole, capacity is expected to reduce by around 3%, reflecting the smaller fleet and a scaled back Eastern schedule offset by some uplift in March due to an earlier Easter.
Christine Ourmieres-Widener, Chief Executive Officer, said:
"We are making strong progress against our sustainable business improvement plan. During this quarter, we continued with our planned fleet and capacity reductions and delivered higher load factors, increased passenger numbers and strong unit revenue performance. We expect this improvement to continue, but at a slightly slower rate in the final quarter of the year. Our investment in maintenance to improve reliability is paying off, demonstrated by the fact that we are again ranked as the UK's most punctual airline. As we continue to reduce our fleet size, but face the impact of higher fuel prices and reduced foreign exchange hedging gains, we are going to be even more focused on improving our cost base.
As always, I would like to thank all Flybe employees for their ongoing support and commitment."
Enquiries:
Flybe Ian Milne, Chief Financial Officer
|
Tel: +44 (0) 20 7379 5151
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Maitland Andy Donald |
Tel: +44 (0)20 7379 5151 |
Flybe UK revenue KPIs
Quarter to31 Dec 2017 | Quarter to31 Dec 2016 | Change% | |
Seats and passengers | |||
Scheduled seats1 (million) | 3.0 | 3.1 | (4.2) |
Passengers2 (million) | 2.3 | 2.1 | 8.1 |
Load factor3 (%) | 75.8 | 67.2 | 8.6ppts |
Revenue | |||
Passenger revenue4 (£m) | 158.8 | 146.3 | 8.5 |
White Label flying revenue (£m) | 9.5 | 8.7 | 9.1 |
Revenue from other activities (£m) | 4.5 | 5.8 | (23.4) |
Total Flybe UK revenue (£m) | 172.8 | 160.8 | 7.4 |
Yield | |||
Passenger yield5 (£) | 69.81 | 69.53 | 0.4 |
Passenger revenue per seat6 (£) | 52.92 | 46.72 | 13.3 |
Cost per seat7 increased by 12.2% and in constant currency increased by 14.2%. Excluding fuel, cost per seat increased 16.6% and in constant currency increased by 17.9%.
Hedging [currently as at 16th Jan]
Flybe UK's current hedge books at 28th January 2018 are summarised below:
Jet fuel
• Q4 2017/18 - 84% hedged at USD 507 per tonne
• H1 2018/19 - 76% hedged at USD 519 per tonne
• H2 2018/19 - 46% hedged at USD 519 per tonne
US Dollar
• Q4 2017/18 - 94% hedged at USD 1.4020
• H1 2018/19 - 82% hedged at USD 1.3260
• H2 2018/19 - 77% hedged at USD 1.3466
Carbon
• Calendar year 2017 - 97% hedged at €2.57 per tonne
• Calendar year 2018 - 0% hedged
Flybe UK's exposure to Euros has been steady but remains under review for hedging.
END
LEI: GB00B4QMVR10
Notes:
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") EU no.596/2014. Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
Forward-looking statements:
Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.
Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and Flybe Group plc ("the Group") plans and objectives for future operations, including, without limitation, discussions of the Group's business plan, expected future revenues, financing plans and expected expenditures. All forward-looking statements in this report are based upon information known to the Group on the date of this Trading Statement. The Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
It is not reasonably possible to itemise all of the many factors and specific events that could cause the Group's forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of the business. Further information on the primary risks of the business and the risk management process of the Group is given in the Annual Report and Accounts 2016/17. This document is available from http://www.flybe.com/corporate/investors.
1 Seat capacity represents the average number of seats per aircraft multiplied by the number of scheduled sectors flown.
2 Passengers are customers with an issued ticket where the ticket has charged a fare and/or a passenger surcharge and tax (if applicable
3 Load factor is sold seats (Flybe ticketed passengers on either Flybe operated scheduled services or hardblock routes operated by the codeshare partner) divided by scheduled available seats (seats available for passenger occupancy on scheduled services).
4 Passenger revenue represents total ticket and ancillary revenue (including unflown APD less refunds) plus revenue from hardblock codeshare arrangements.
5 Passenger yield represents total passenger revenue (as defined in note 4) per passenger after the deduction of government taxes and levies.)
6 Passenger revenue per seat is passenger revenue generated divided by scheduled available seats.
7 Cost per seat includes all costs related to White Label operations (aircraft ownership cost, crew, maintenance, insurance and overheads), but not the flown seats associated with White Label operations.