UK regional carrier flybe. (2002) (Exeter) has released its annual report, showing a loss before tax of GBP19.9 million (USD25.4 million) and a net debt of GBP64 million (USD81.5 million).
Non-executive Chairman Simon Laffin blamed the poor performance on over capacity brought on by legacy fleet orders placed at the time of the airline's IPO in 2010. The fleet reached its peak in May 2017 with 85 aircraft. The additional capacity in 2016 of 12.3% was against a passenger increase of only 7.6%. The result was a load factor drop of 3 points to 69.6% and a negative effect on profitability.
In a bid to cut capacity, new CEO Christine Ourmieres-Widener has confirmed that six end-of-lease DHC-8-400s - of which it currently has fifty-eight - will be returned to lessors in 2017/18. The airline will then begin to consolidate its operations and focus on profitable routes.
"Looking beyond the UK at this stage it is neither the right moment, nor do the markets currently support, an expansion of intra-European activity," Ourmieres-Widener said. "We will deliver a controlled expansion mainly via the optimisation of our partnerships."
As previously reported, flybe this week signed a partnership agreement with Eastern Airways (T3, Humberside) with the latter to operate its scheduled route network under the Flybe brand, with a strong focus on Scotland.
