Flybe focuses on costs as passenger numbers rise

Low-cost carrier Flybe saw passenger revenue jump 8.5% in its third trading quarter, thanks to an 8.1% increase in passenger numbers.

Flybe's revenue took off to £158.8m, from £146.3m over the same period a year earlier as passenger numbers grew to 2.3m in the three months leading 31 December.

Passenger revenue per seat rose 13.3% to £52.92 and load factor, an industry measure of seats sold, grew to 75.8%.

Flybe told investors on Wednesday that cost reductions remained a key focus for management, and vowed to review its ability to balance improved reliability with higher maintenance costs.

The Exeter-based airline cut seat capacity 4.2% to 3m over the period as it completed the first four of 2018's six end-of-lease Q400 handbacks returned to the lessor in the quarter, with the next two scheduled for return before the end of March.

Flybe's commercial agreement with Stobart Air to operate two E195 jets under a dry lease arrangement from London Southend began during the quarter.

Chief executive Christine Ourmieres-Widener 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," she added.

As of 0840 GMT, shares had lost 2.97% to 34.93p.