Flybe Group Regulatory News (FLYB)

3 April 2018

Flybe Group plc

("Flybe" or "the Group")

TRADING UPDATE

Flybe continues to drive load factors as capacity reduces

Flybe's turnaround continues with a further improvement in load factors as we reduce capacity1. In Q4, load factors2 were up by 6.8 ppts to 73.5%, a strong performance for the winter season. As a result, estimated passenger revenue4 per seat was up by 9.0% to £50.84. Passenger numbers3 rose by 3.7%, even though capacity was reduced by 6.0%.

The extremely poor weather in February and March however led to airport closures and flight cancellations across the UK and near continent. This particularly affected Flybe as all our flying is within this area. We had to cancel 994 flights due to weather in Q4 compared to 372 in Q4 last year. As a result, we anticipate this to have an impact of around £4m from lost revenue and additional care and assistance costs on cancelled and delayed flights. Coming so late in the financial year means that this added loss will be reflected in our full year financial results.

At 31 March 2018, Flybe has returned five of the planned six end-of-lease aircraft with the final one to be returned in early April. At the year end, Flybe will have a total fleet size of 80 aircraft (31 March 2017: 83) which will fall to 79 once the final handback is completed.

We expect net debt at 31 March 2018 to be broadly flat year on year.

Early Indications of summer UK (H1 2018/19) trading

Our strategy to reduce capacity to focus on profitable flying will continue into the new financial year. Very early indications of our summer trading are encouraging with an estimated 7.5% increase in passenger revenue per seat offsetting an expected 7.9% decrease in capacity. So far, we have sold 21% of our H1 capacity, against 20% sold at the same time last year.

Christine Ourmieres-Widener, Chief Executive, 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."

Enquiries:

Flybe UK KPIs

Hedging

Flybe UK's current hedge books5 at 31 March 2018 are summarised below (all hedges are forward swaps).

Jet fuel

· H1 2018/19 - 76% hedged at $519 per tonne

· H2 2018/19 -43% hedged at $517 per tonne

· H1 2019/20 -3% hedged at $584 per tonne

US Dollar

· H1 2018/19 - 76% hedged at $1.3260

· H2 2018/19 - 67% hedged at $1.3466

· H1 2019/20 - 32% hedged at $1.3724

Flybe UK currently has a broadly neutral position in Euro income and expenditure.

Carbon

· Calendar year 2017 - 85% acquired at €2.57 per tonne with the shortfall due to additional requirements identified in a recent emissions audit. Given recent high price rises, the fully costed final acquisition price is estimated to be c €3.80 per tonne.

· Calendar year 2018 - 39% hedged following the issue of free EU allowances. No additional allowances have been acquired to date.

END

LEI Number: 5493005SC6523Y8KJF24

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.

Notes:

1. Seat capacity represents the actual number of seats flown

2. Load factor is flown 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)

3. Passengers are customers with an issued ticket where the ticket has charged a fare and/or a passenger surcharge and tax (if applicable)

4. Passenger revenue represents total ticket and ancillary revenue (including unflown APD) less refunds plus revenue from hardblock codeshare arrangements

5. Based on anticipated fuel and USD 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 2016/17; these documents are available on http://www.flybe.com/corporate/investors.