Interim Management Statement

Released : 23/01/2013

RNS Number : 1414W
Flybe Group PLC
23 January 2013
 



Flybe Group plc

('Flybe' or 'the Group')

 

Interim Management Statement

 

Flybe, Europe's largest regional airline, today announces its Interim Management Statement for the period to 23 January 2013, incorporating its performance in the third quarter ended 31 December 2012 ('Q3 2012/13') and confirms guidance for the full year.

 

Flybe is this morning also separately announcing details of the setting of medium term operational profit targets and a turnaround plan to return the Group to profitability in 2013/14.

 

Flybe will announce preliminary results for the year ended 31 March 2013 in June 2013.

 

Highlights1

 

Group

 

·              Total revenue under management2 showed an increase of 17.2% to £193.9 million, with the growth being
 driven predominantly by Flybe Finland, Flybe's joint venture with Finnair.

·              Group revenue increased by 2.5% to £143.2 million primarily driven by the increase in contract flying revenue.

·              Operated seats flown under management (including contract flying and charter) were 3.9 million, up by 13.5% from 3.4 million in Q3 2011/12. 

·              Scheduled seats flown under management were in line with Q3 2011/12 at 3.0 million. 

·              Total cash at 31 December 2012 was £44.5 million.

 

Flybe UK

 

·              Flybe UK generated total revenues of £137.1 million in Q3 2012/13, up 2.5% on Q3 2011/12.

·              Operated seats flown were up 4.9% to 2.9 million.

·              Scheduled seats flown were 2.7 million, in line with Q3 2011/12. 

·              Passengers totalled 1.7 million, up 3.0% on Q3 2011/12, representing a load factor of 63.7% (Q3 2011/12: 61.7%).

·              Passenger revenue per scheduled seat was in line at £47.39 (Q3 2011/12: £47.41).  There has been an impact on this KPI from the removal of debit card charging from April 2012 as directed by the Office for Fair Trading ('OFT').

·              Costs per operated seat for the quarter to 31 December 2012 (excluding fuel) increased by 0.8%. 

·              Fuel hedged at $1,031 per tonne for 76% of forecast burn in Q4 2012/13, and 56% hedged for H1 2013/14 at $1,002 per tonne.

 

Flybe Europe

 

·              Flybe Finland generated total revenues of £50.7 million in Q3 2012/13, up 95.8% on Q3 2011/12 due to increased aircraft on contract flying. This comprised contract flying revenue of £42.2 million, passenger revenue of £7.1 million and revenue from other activities of £1.4 million.

·              Operated seats flown were 1.0 million, up 49.2%, of which scheduled seats totalled 0.2 million. Passenger numbers and load factor were 0.1 million and 41.8% respectively.

·              Passenger revenue per seat was £33.82, an increase of 11.8% on Q3 2012/13.

 

Flybe Aviation Support

 

·              Flybe's MRO facility produced revenues of £5.8 million from third party customers in Q3 2012/13 (Q3 2011/12: £5.9 million).

·              Third party revenues at Flybe's Training Academy in Q3 2012/13 totalled £0.4 million (Q3 2011/12: £0.1 million).

 

Trading outlook

 

·              Management's guidance for the 2012/13 full year outturn remains unchanged from that given in the 2012/13 Q1 IMS on 10 August 2012.

 

23 January 2013

 

Enquiries:

 

Flybe

Tel: +44 20 7457 2020

Jim French, Chairman & Chief Executive Officer


Andrew Knuckey, Chief Financial Officer




College Hill

Tel: +44 20 7457 2020

Mark Garraway


Helen Tarbet


 

 

 

Flybe under management KPIs (including Flybe Finland)


Quarter to
31 December 2012

Quarter to
31 December 2011

Change
%

Seats and passengers




Operated seats (million)

3.85

3.39

13.5

Scheduled seats (million)

2.95

3.02

(2.5)

Passengers (million)

1.83

1.80

1.7

Load factor (%)

62.1%

59.6%

2.5 ppts





Revenue




Passenger revenue (£m)

136.9

138.5

(1.2)

Contract flying revenue (£m)

46.1

17.0

171.1

Revenue from other activities (£m)

10.9

10.0

9.1

Total revenue under management (£m)

193.9

165.5

17.2





 

Flybe UK

 

Flybe UK comprises Flybe's UK domestic and UK to European airline operations.

 

KPIs

 


Quarter to
31 December 2012

Quarter to
31 December 2011

Change
%

Seats and passengers




Operated seats (million)

2.88

2.75

4.9

Scheduled seats (million)

2.74

2.75

(0.3)

Passengers (million)

1.74

1.69

3.0

Load factor (%)

63.7%

61.7%

2.0 ppts





Revenue




Passenger revenue (£m)

129.8

130.2

(0.3)

Contract flying revenue (£m)

3.9

-

n/m

Revenue from other activities (£m)

3.4

3.5

(2.9)

Total Flybe UK revenue (£m)

137.1

133.7

2.5





Yield




Passenger yield (£)

74.44

76.90

(3.2)





Passenger revenue per seat (£)

47.39

47.41

(0.1)





 

Revenue

 

Operated seats flown in Q3 2012/13 increased by 4.9% to 2.88 million.  Scheduled seats flown in the period were 2.74 million which was 0.3% down on Q3 2011/12.

 

Passenger numbers in Q3 2012/13 were 1.74 million, 3.0% higher than the same period in 2011/12. The load factor also showed an increase of 2.0 ppts to 63.7%. 

 

Passenger yield decreased by 3.2% to £74.44 - this reflects the impact of removing debit card charging in April 2012 in accordance with OFT directions and the lower levels of baggage revenue.

 

Passenger revenues of £129.8 million were down by 0.3% on the prior year.  Passenger revenue per scheduled seat was in line at £47.39.

 

Contract flying revenue in Flybe UK was £3.9m due to the commencement of the Brussels Airlines contract flying agreement, with four aircraft now operating with them. Revenue from other activities in Q3 2012/13 was in line with the same period last year at £3.4 million.

 

Costs

 

Flybe UK's costs per operated seat for the quarter to 31 December 2012 (excluding fuel) increased by 0.8%. 

 

Hedging

 

Flybe UK's current hedge books3 are summarised below (all hedges are forward swaps).

 

Jet fuel

 

·      Q4 2012/13 - 76% hedged at $1,031 per tonne

·      H1 2013/14 - 56% hedged at $1,002 per tonne

·      H2 2013/14 - 23% hedged at $979 per tonne

 

US Dollar

 

·      Q4 2012/13 - 52% hedged at $1.58

·      H1 2013/14 - 50% hedged at $1.58

·      H2 2013/14 - 39% hedged at $1.60

 

Carbon

 

·      Calendar year 2012 - 94% hedged at €6.47 per tonne

·      Calendar year 2013 - 52% hedged at €7.46 per tonne

 

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

 

Market share

 

Market share of the Flybe brand in the UK regional market (excluding London) in the three months to 31 December 2012 was 53.8% (Q3 2011/12: 50.5%).

 

Total UK domestic market share of the Flybe brand in the same period was 28.1% (Q3 2011/12: 27.9%).

 

Flybe Europe

 

Flybe Europe comprises the joint venture based in Finland including its MRO operation.

 

KPIs

 


Quarter to
31 December 2012

Quarter to
31 December 2011

Change
%

Seats and passengers




Operated seats (million)

0.97

0.65

49.2

Scheduled seats (million)

0.21

0.27

(22.2)

Passengers (million)

0.09

0.11

(18.2)

Load factor (%)

41.8%

39.3%

2.5 ppts





Revenue




Passenger revenue (£m)

7.1

8.3

(14.5)

Contract flying revenue (£m)

42.2

17.0

148.1

Other revenue (£m)

1.4

0.6

135.9

Total Flybe Europe revenue (£m)

50.7

25.9

95.8





Yield




Passenger yield (£)

81.01

77.03

5.2





Passenger revenue per seat (£)

33.82

30.25

11.8





The 148.1% increase in revenues from contract flying to £42.2 million has been driven by the commencement on 28 October 2012 of an additional 12 E190 aircraft on contract flying for Finnair. 

 

Flybe Aviation Support

 

Flybe Aviation Support provides maintenance, repair and overhaul ('MRO') and training services to Flybe UK, Flybe Europe and third party customers. 

 

Flybe's MRO facility produced revenues of £5.8 million from third party customers in Q3 2012/13 (Q3 2011/12: £5.9 million).

Two flight simulators have now been installed in the Academy (one Bombardier Q400, one Embraer E170-E190), providing training for Flybe and third party pilots. Third party revenues at the Training Academy totalled £0.4 million (Q3 2011/12: £0.1 million).

 

Fleet

 

Deliveries

In Flybe UK, one new 88-seat Embraer E175 regional jet (out of the firm order for 35 aircraft) was delivered in Q3 2012/13 to Flybe UK, on an operating lease.  

 

In Flybe Finland, 12 100-seat Embraer E190 regional jets were delivered in Q3 2012/13 to Flybe Finland, on operating leases and these aircraft are being deployed on contract flying arrangements for Finnair.  One 72-seat ATR72 was delivered in Q3 2012/13, on an operating lease.

 

Disposals

 

During Q3 2012/13, Flybe Finland handed back one ATR42 at the end of its lease term.

 

Current fleet

 

As at 31 December 2012 Flybe's aircraft fleet under management is as follows:

 


Number of seats

Owned with debt finance or

finance lease

Operating

lease

Total

Flybe UK





Embraer E195 regional jet

118

-

14

14

Embraer E175 regional jet

88

6

3

9

Bombardier Q400 turboprop

78

4

43

47

Flybe Europe





ATR 72 turboprop

68-72

-

12

12

ATR 42 turboprop

48

-

2

2

Embraer E170 regional jet

76

-

2

2

Embraer E190 regional jet

100

-

12

12

Total


10

88

98

 

Of the total fleet of 98 aircraft, 26 are being deployed on contract flying for Finnair and Brussels Airlines.

 

The average age of the fleet is 4.8 years.

 

Current trading

 

The business continues to experience a late booking profile from its passengers, reflecting the high propensity of business travellers.  Flybe UK's forward passenger sales revenue for Q4 2012/13 currently shows an increase over last year of circa 2%, driven by a small increase in passenger volumes. 

 

Flybe UK's forward passenger sales revenue for Summer 2013 currently shows a year on year increase of circa 5%, driven by yield improvements.

 

END

 

Notes:

 

1.             Operated seats are the number of seats flown including those on Flybe scheduled services, contract flying and charter flights.

2.             Scheduled seats are the number of seats flown on Flybe scheduled services.

3.             Passengers are people with an issued ticket where the ticket has charged a fare and/or a passenger surcharge and tax (if applicable).  This includes people who purchase a ticket and do not show up for the flight where, as is usually the case, the ticket is non-refundable.

4.             Seats represent the number of seats flown.

5.             Load factor is the number of passengers divided by seats flown.

6.             Passenger yield represents total ticket and ancillary revenue per passenger.

7.             Passenger revenue per seat represents total ticket and ancillary revenue per seat.

8.             IATA is the International Air Transport Association.

 

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 2011/12; these documents are available on http://www.flybe.com/corporate/investors.

 



1All figures are compared to the equivalent figures for the three months to 31 December 2011.

2 Includes revenue from Flybe Finland Oy, a joint venture between Flybe (60%) and Finnair (40%) - Flybe has management and operational responsibility for Flybe Finland.

3 Based on anticipated fuel, USD and carbon requirements.

 


This information is provided by RNS
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END
 
 
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