Flybe posts first half loss of £1.3m

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UK regional carrier Flybe has posted a post-tax first-half loss of £1.3 million ($2.08 million) for the period to 30 September 2012, reversing a £14.6 million profit in H1 2011.

Total revenue under management grew 13% to £396 million, including £55.5 million from joint venture Flybe Nordic. EBITDAR for the period stood at £46.7 million.

The group has net assets of £85.4 million as of 30 September 2012 - down slightly from £89.4 million at 31 March 2012 - while its first-half operating cash outflow was £4.8 million.

"The adverse variance in H1 2012/13 performance versus H1 2011/12 was largely due to higher fuel costs not being offset by a corresponding growth in group revenue, as adverse macro-economic conditions continued," Flybe says in a statement.

First-half passenger numbers for the UK division dipped slightly year-on-year from 4.2 million to 4 million, with load factor down 0.6 percentage points to 65%.

The airline's fleet substitution programme continued with the delivery of four Embraer 175s - two on operating lease and two financed using Flybe's loan facility with Brazilian export bank BNDES - as well as the sale of two Bombardier Dash 8 Q400s, which generated a small profit on disposal.

Existing aircraft in the fleet were deployed on six new routes at East Midlands airport, to take advantage of the closure of BMIbaby, preserving Flybe's 29% share of the UK market.

Flybe Nordic contributed 14.5% of the group's revenue and remains on-track to deliver profitability in 2013/14, the company says.

As of 28 October an additional 12 E-190s were transferred to Flybe Nordic from Finnair, bringing its total fleet size to 28 aircraft including 21 deployed on contract flying.

Flybe chief executive Jim French says the group results are in-line with its revised expectations, issued in August, adding that ongoing challenges in the UK domestic market "validate" Flybe's "long-term strategy on rebalancing our route network by growing our European operations".

"The UK domestic aviation market continues to show little sign of recovery, with the market trending a year-on-year decline," he notes. "Since this represents 75% of Flybe UK's passenger base, this decline continues to pose challenges on our UK business."

The group operates a total of 97 aircraft. Flybe's UK fleet comprised 47 Q400s, 14 E-195s and eight E-175s, while Flybe Nordic operates 12 E-190s, two E-170s, 11 ATR 72s and three ATR 42s.