28 Jan 2016 07:00
Flybe Group plc
('Flybe' or 'the Group')
Q3 2015/16 TRADING STATEMENT
FLYBE'S RETURN TO GROWTH CONTINUES
Flybe today provides its trading update for the three month period from 1 October 2015 to 31 December 2015.
The return to growth delivered in H1 has continued in Q3 despite the impact of a reduction in travel following the events in Paris in November and pressure on yields from industry wide capacity growth acceleration and lower fuel costs. Flybe focused on yield protection and accelerated some of its cost saving initiatives, while also reducing its fourth quarter capacity growth rate by c10ppts.
The return to growth has continued in Q3
· 10.1% increase in seat capacity1 to 2.8m seats (Q3 2014/15: 2.5m seats)
· 2.1% increase in passenger volumes2 to 1.92m (Q3 2014/15: 1.88m passengers)
· 3.6% growth in passenger revenue3 to £128.9m (Q3 2014/15: £124.4m)
Encouraging unit revenue development as yield prioritised over load factor
· 1.2% improvement in passenger yield4 to £67.66 (Q3 2014/15: £66.84)
· 5.4ppts reduction in load factor5 to 68.9% (Q3 2014/15: 74.3%)
· 6.1% reduction in passenger revenue per seat6 to £46.61 (Q3 2014/15: £49.65)
Cost reductions at constant currency sustained in Q3
· 2.2% reduction in cost per seat (UK, excluding fuel)
· 4.7% reduction in cost per seat (UK, including fuel)
Q4 2015/16 forward bookings (as at 24 January 2016) reflect Flybe's increased schedule focus on business travellers with their late booking profile
o 3.2% increase in seat capacity vs. prior year
o c37% of seats sold vs. c40% in the prior year
o 2.0% increase in yield vs. prior year
o 6.2% decrease in passenger revenue per seat vs. prior year
Flybe's focus on business travellers is being increasingly recognised
· In January, Flybe was named Best Short Haul Airline at the 2016 Business Travel Awards, beating amongst others easyJet and British Airways.
Saad Hammad, Chief Executive Officer, said:
"The tragic events in Paris overshadowed this last quarter and caused a significant hiatus in airline bookings, not just to France, but also on UK domestic and near-continent travel. As we expected, the combination of higher capacity in the market and lower spot fuel prices have led to lower yields sector-wide, even as the benefits start to come through from the unwinding of fuel price hedging. In this uncertain environment, we decided to protect yields rather than to chase unprofitable marginal revenue.
"As a result, revenue has grown by 3.6%, and this, together with continued reductions in unit costs, reinforces our resilience as a business, now that all legacy issues have been resolved. Passenger demand is now slowly recovering and reflecting a later booking profile. Meanwhile, it is encouraging that our focus on business travellers is increasingly recognised as being amongst the best in the industry."
Enquiries:
Flybe
Philip de Klerk, Chief Financial Officer | Tel: +44 (0)20 7379 5151 |
Maitland
Neil Bennett
Andy Donald | Tel: +44 (0)20 7379 5151 |
Flybe UK KPIs
Quarter to31 Dec 2015 | Quarter to31 Dec 2014 | Change% | |
Seats and passengers | |||
Scheduled seats (million) | 2.8 | 2.5 | 10.1 |
Passengers (million) | 1.92 | 1.88 | 2.1 |
Load factor (%) | 68.9 | 74.3 | (5.4) ppts |
Revenue | |||
Passenger revenue (£m) | 128.9 | 124.4 | 3.6 |
Contract flying revenue (£m) | 3.8 | 2.1 | 77.4 |
Revenue from other activities (£m) | 3.5 | 3.5 | - |
Total Flybe UK revenue (£m) | 136.2 | 130.0 | 4.7 |
Yield | |||
Passenger yield (£) | 67.66 | 66.84 | 1.2 |
Passenger revenue per seat (£) | 46.61 | 49.65 | (6.1) |
Hedging
Flybe UK's current hedge books7 @ 18 January 2016 are summarised below (all hedges are forward swaps).
Jet fuel
· Q4 2015/16 - 92% hedged at $794 per tonne
· H1 2016/17 - 87% hedged at $599 per tonne
· H2 2016/17 - 81% hedged at $551 per tonne
US Dollar
· Q4 2015/16 - 71% hedged at $1.54
· H1 2016/17 - 67% hedged at $1.54
· H2 2016/17 - 54% hedged at $1.53
Carbon
· Calendar year 2015 - 100% hedged at €5.40 per tonne
· Calendar year 2016 - 91% hedged at €7.64 per tonne
Flybe UK currently has a broadly neutral position in Euro income and expenditure.
END
Notes:
1. Seat capacity is the number of seats on an aircraft available for passenger occupancy
2. Passengers are any person who has a ticket to fly on the aircraft
3. Passenger revenue is the sum of ticket revenue and ancillary revenue less refunds on scheduled services
4. Passenger yield is passenger revenue per sold passenger
5. Load Factor is scheduled seats sold divided by scheduled available seats
6. Revenue per seat is scheduled seat revenue divided by scheduled available seats
7. Based on anticipated fuel, USD and carbon requirements
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 IMS. 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 2014/15; these documents are available on http://www.flybe.com/corporate/investors.