Flybe cuts jobs losses as turnaround gains momentum
The group, which flies from Leeds Bradford International Airport, is reducing the number of positions facing the axe by 10 per cent to around 450, with roughly 40 to 60 compulsory redundancies.
The fall comes after Flybe set out major expansion plans for Birmingham on Friday with seven new routes, including Florence, Cologne and Porto, making the airport its biggest base with 12 aircraft in total.
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Flybe’s refocus towards the larger sites in its network has seen it close bases in Inverness, Aberdeen, Isle of Man, Newcastle, Jersey and Guernsey, although it will continue to fly to those airports.
Its base in Exeter is still expected to be the hardest hit for job losses with around 100 posts set to go.
Flybe has already discontinued 30 unprofitable routes for this summer as part of its restructuring drive.
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Chief executive Saad Hammad said the airline was now on track to deliver £40m of annual cost savings by the end of March.
He said: “Taking decisive action gives us a strong platform to implement our strategy, achieve profitable growth and build sustainable value for our shareholders.
“We are well on our way to becoming Europe’s best local airline.”
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Hide AdFlybe’s third quarter trading for 2013/14 was in line with management expectations, with total revenues for its UK airline business broadly flat at £137.6m, despite a 1.8 per cent cut in capacity.
Passenger numbers grew by 9.2 per cent to 1.9 million.
Meanwhile, ‘white label’ sales for its joint venture in Finland climbed 23.7 per cent to £52.2m.
Liberum analyst Gerald Khoo said: “Part of Flybe’s strategy to improve its commercial performance is better revenue management, and there is clear evidence of this being delivered, with lower average fares (down 8.1 per cent in the third quarter) driving stronger volume growth, but with revenue per seat improving.”
Flybe saw the end of an era last November when the family trust of late steel magnate Jack Walker sold its entire shareholding.
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Hide AdThe Walker family trust, which took on the assets of the northern businessman and former Blackburn Rovers football club owner, was the majority shareholder of Flybe through Rosedale Aviation Holdings before offloading its 48.1 per cent stake for £25.2m.
It cut long-held ties with the Walker family, originally formed in 1983 when Mr Walker’s steel business took over the then Jersey European Airways, which was later rebranded British European before becoming Flybe in 2002.
Mr Hammad hailed the move as a “milestone” after the shares were snapped up by new and existing investors.
It is thought that shareholders, including billionaire US investor George Soros, increased their stakes in the group.