Flybe points to a strong lift in passenger volumes in the final quarter as more than offsetting lower yields after the restructuring group reported performance in line with management expectations in a trading update today.
The company says its UK scheduled airline business boosted passenger volumes 6% to 1.6 million for the three months ending March 2014, despite a 4% cut in capacity. The helped increase passenger load six percentage points to 70%. "This largely reflects the continued success of Flybe's competitive pricing strategy to offer more attractive lead-in fares, with higher passenger volumes more than offsetting lower yields, leading to a 4% increase in passenger revenue per seat to £49.80 ($82.73)."
It points to positive forward sales for the UK operation, having sold 20% of its summer seat capacity – compared with 17% at the same stage last year – in part helped by the busy Easter period falling in April this year.
"Encouragingly, the eight new routes launched in February from the UK's second-largest city, Birmingham, have exceeded expectations with 30% of summer 2014 seat capacity already sold," it says.
The company says it remains on course to deliver around £71m of savings in the next financial year, in line with the targets outlined in November 2013.
Flybe adds its Finnish white-label business – where it provides services under a joint venture with Finnair – continues to be profitable. "However, the joint venture is addressing the performance of the scheduled flying part of the business, withdrawing two (of the six) aircraft from service in Q1 2014/15," it says.
Flybe, which raised $150 million in a share offer earlier this year, has embarked on a major restructuring of its business after three years of consecutive operating losses.