Airline emerges from ash cloud with confidence

The airline, which flies from Leeds Bradford, Doncaster and Humberside airports, said its load factor – a measure of how full its planes are – increased by 0.4 percentage points to 63.1 per cent in the three months to the end of June, on a year earlier.

Passengers increased by 7.7 per cent to two million, and Flybe said its customers spent more on extras such as car hire, baggage and advance seat assignment.

Its ancillary yield increased by eight per cent to £13.89 and Flybe’s ticket yield grew by 3.4 per cent to £62.27. That helped lift the airline’s revenue per seat by 4.9 per cent to £48.09.

“This is a satisfactory trading and operational performance achieved against a continuing backdrop of high fuel costs and challenging economic conditions,” said Flybe’s chairman and chief executive Jim French. “We are pleased to report encouraging increases in revenue per passenger and revenue per seat.”

Flybe, which claims to be Europe’s largest regional airline, said passenger revenues grew 12.2 per cent year-on-year to £150.6m – but were flattered by 2010’s Icelandic volcanic eruption.

Seats flown increased by seven per cent to 3.1m but excluding the volcanic eruption these decreased by 1.7 per cent.

Mr French said the airline, which floated on the London Stock Exchange late last year, has made “excellent progress” with its growth plans, including buying Finnish flag carrier Finncomm for up to £21.3m last month. It has also bolstered its management and divisional structures and sold aircraft.

“Current trading is encouraging, with forward ticket sales revenue up six per cent year-on-year,” said Mr French.

“Though at an early stage of the year and with uncertain macro-economic conditions facing us, based on current trading the board maintains its expectations for the full year, and is well placed to deliver on its growth plans in the coming years.”

The airline said passenger numbers grew 3.8 per cent in July to 0.76m – although this was skewed by the volcano impact.

It said this increase, coupled with a 2.2 per cent year-on-year reduction in seats flown to 1.09m, meant its load factor further improved to 69.1 per cent.

July passenger revenues per seat surged by 10.1 per cent.

Flybe added 87.1 per cent of its planes departed on time, compared with 85.4 per cent in 2010.

Charles Stanley analyst Douglas McNeill said the update was “satisfactory”. “The underlying rate of growth is much lower than these headline numbers suggest, distorted as they are by last year’s volcanic ash affair, but that’s wise in current trading conditions,” he said.

“Cost performance is in line with expectations, and hence the earnings outlook is too.”