Flybe H1 profit drops but at upper end of guidance

Flybe posted near-50% drop in profit for the first half on Thursday as took a hit from increased aircraft maintenance costs.

In the six months to 30 September, adjusted pre-tax profit dropped 47.2% to £8.4m, largely due to the previously-announced one-off onerous IT contract provision and the impact of increased aircraft maintenance costs. Still, this was towards the upper end of the range of between £5m and £10m announced in the company’s update last month.

Meanwhile, revenue was up 9.3% to £418.5m. Flybe UK saw total revenue rise 11.6% to £406.8m, with 3% growth in seat capacity and an 8.8% jump in passenger volumes to 5.2m. Flybe Aviation services also saw an 11.6% increase in revenue, to £26.6m.

The airline said its load factor - which gauges how full the planes are - improved to 76% from 72% in the first half of last year, while revenue per seat was up 8.8% to £55.29m.

Chief executive officer Christine Ourmieres-Widener said: "We have made good progress in the first half of the year and with our fleet size under control, we are already delivering improvements to passenger yield and load factors. Load factors are expected to continue to strengthen as the fleet reduces and we anticipate that yields will stabilise.

“While half-year profits are lower than last year, due to the one-off IT contract costs, higher maintenance expenses and the impact of the fall in the value of sterling, I am confident that we are on a clear path to sustainable profitability through the investments and improvements we are making at Flybe. In the second half, we will focus on improving our cost base and reliability performance while preparing the business for the future as we invest in the new digital platform.”

At 1305 GMT, the shares were up 0.5% to 36.42p.