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Andy Onchan

Flybe nosedives on profits warning

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From The Times this morning:

 

Everything that could go wrong is going wrong for the regional airline Flybe, which says a tough aviation market will send it into the red, even without other issues to spook investors.

 

In a statement before the close of its financial year tomorrow, Flybe said that its online offering was not what it could be and it has issues with software and IT contracts which will take up to £10 million off profits. Even before that, Flybe was going to make “a small loss”.

 

The news sent the airline’s already depressed share price down more than 5 per cent before it recovered to close 50p down at £42.50.

 

For a company that has used its fair share of excuses over the years Flybe’s statement was vintage. “The [fourth- quarter] period has been characterised by weak demand in an uncertain consumer environment, together with price competition arising from overcapacity amongst airlines and sharpened price activity from rail operators,” it said. “Weather related and operational cancellations, as well as industrial action, mainly by French air traffic controllers, also impacted revenue.”

 

Saad Hammad quit as chief executive in the autumn after three years of what Flybe billed as “a major transformation”. It then announced a 70 per cent plunge in pre-tax profits at the half year to £7 million.

 

The statement continued: “Flybe is planning a major upgrade to its core systems, which will significantly improve the customer experience and allow greater ecommerce. A full review of software assets and IT contracts is expected to result in additional cost and non-cash writedowns, which could impact profit by around £5 million to £10 million. Excluding this, adjusted profit before tax for the year ended March 31 is expected to be a small loss.”

 

Christine Ourmières-Widener, chief executive, said that she remained “very excited about the opportunities in Flybe”.

 

Announcing plans to reduce its fleet of 85 aircraft, Ms Ourmières-Widener said: “We must first rebuild some of our core systems and this is now starting.

 

“We shall continue to reduce costs, work with our partners to improve efficiency and stop unprofitable flying.”

 

Oh dear... could reduced number of aircraft = reduced number of flights to/from IOM??

 

IMO DED should be seriously worried about this.

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They already get shitloads of money from the patient transfer contract. Manchester and Liverpool are secure.

Birmingham isn't secure however.

 

Flybe are really shitting up when fuel is so cheap...

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Oh. And the CAA just fucked over the one based airline, Vanair, who had been flying here for over ten years. So yes, the Isle of Man is now at the mercy of the other airlines who aren't based here. It'll probably be ok, but there's no assurances

Edited by Tarne

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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

Edited by Douglas Prom

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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

 

Stobart are as likely to walk away from IOM as any other airline if they can't make it pay.

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Stobart is just aer arannn rebranded.

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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

 

Stobart are as likely to walk away from IOM as any other airline if they can't make it pay.

 

 

However Stobart's haven't over-reached themselves be aiming to be the premiere regional UK service and started flying from all kinds of far flung destinations. They just fly select routes that they can make some money from. The Isle of Man will make an airline some money if it did it correctly.

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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

Stobart are as likely to walk away from IOM as any other airline if they can't make it pay.

However Stobart's haven't over-reached themselves be aiming to be the premiere regional UK service and started flying from all kinds of far flung destinations. They just fly select routes that they can make some money from. The Isle of Man will make an airline some money if it did it correctly.

My guess is that any routes they or any other operator to/from IOM would need is to have some form of support similar to the ferry agreement. The open skies policy hasn't worked.
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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

Stobart are as likely to walk away from IOM as any other airline if they can't make it pay.

However Stobart's haven't over-reached themselves be aiming to be the premiere regional UK service and started flying from all kinds of far flung destinations. They just fly select routes that they can make some money from. The Isle of Man will make an airline some money if it did it correctly.

My guess is that any routes they or any other operator to/from IOM would need is to have some form of support similar to the ferry agreement. The open skies policy hasn't worked.

 

 

It should therefore come out of the Enterprise Fund and not go to friends of friends. There is nothing more important to an island's economy than it's transport links.

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Flybe don't even operate flights here, it's a franchise for Stobart Air. Stobart are doing just fine.

 

The only Flybe plane that comes to the Island is once a week for Geneva - I think we could live without that if it went.

 

The rumours I am hearing on the ground is that Stobart will be operating the flights in their own name from March 2018 and will have a Flybe code-share.

Stobart are as likely to walk away from IOM as any other airline if they can't make it pay.

However Stobart's haven't over-reached themselves be aiming to be the premiere regional UK service and started flying from all kinds of far flung destinations. They just fly select routes that they can make some money from. The Isle of Man will make an airline some money if it did it correctly.

My guess is that any routes they or any other operator to/from IOM would need is to have some form of support similar to the ferry agreement. The open skies policy hasn't worked.

 

 

It should therefore come out of the Enterprise Fund and not go to friends of friends. There is nothing more important to an island's economy than it's transport links.

 

 

Absolutely agree about your last sentence. However, it should not be necessary for any money to change hands to get what is required.

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From The Times this morning:

 

Everything that could go wrong is going wrong for the regional airline Flybe, which says a tough aviation market will send it into the red, even without other issues to spook investors.

 

In a statement before the close of its financial year tomorrow, Flybe said that its online offering was not what it could be and it has issues with software and IT contracts which will take up to £10 million off profits. Even before that, Flybe was going to make “a small loss”.

 

The news sent the airline’s already depressed share price down more than 5 per cent before it recovered to close 50p down at £42.50.

 

For a company that has used its fair share of excuses over the years Flybe’s statement was vintage. “The [fourth- quarter] period has been characterised by weak demand in an uncertain consumer environment, together with price competition arising from overcapacity amongst airlines and sharpened price activity from rail operators,” it said. “Weather related and operational cancellations, as well as industrial action, mainly by French air traffic controllers, also impacted revenue.”

 

Saad Hammad quit as chief executive in the autumn after three years of what Flybe billed as “a major transformation”. It then announced a 70 per cent plunge in pre-tax profits at the half year to £7 million.

 

The statement continued: “Flybe is planning a major upgrade to its core systems, which will significantly improve the customer experience and allow greater ecommerce. A full review of software assets and IT contracts is expected to result in additional cost and non-cash writedowns, which could impact profit by around £5 million to £10 million. Excluding this, adjusted profit before tax for the year ended March 31 is expected to be a small loss.”

 

Christine Ourmières-Widener, chief executive, said that she remained “very excited about the opportunities in Flybe”.

 

Announcing plans to reduce its fleet of 85 aircraft, Ms Ourmières-Widener said: “We must first rebuild some of our core systems and this is now starting.

 

“We shall continue to reduce costs, work with our partners to improve efficiency and stop unprofitable flying.”

 

Oh dear... could reduced number of aircraft = reduced number of flights to/from IOM??

 

IMO DED should be seriously worried about this.

 

I hope the rest of the information is more accurate than the share price quoted,

 

Flybe could just as easily decide to do the flights themselves rather than leasing in Stobart to do the flights for them, they could probably do Liverpool and Manchester without any aircraft being based here overnight although that could depend on what the terms of the patient transfer contract are.

 

Open skies- one of the great legacies from our former leaders

Edited by ellanvannin2010

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The Isle of Man will make an airline some money if it did it correctly.

 

Not convinced. Aviation's been around for a century and it's not happened yet.

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The Isle of Man will make an airline some money if it did it correctly.

 

Not convinced. Aviation's been around for a century and it's not happened yet.

 

 

 

 

Is this true? I genuinely don't know and I'm not sure that any airline discloses profit/loss on a route by route basis. But beyond the support Poker Stars said they were putting into the BA LCY service, I'm not aware of any subsidy, although I stand to be corrected.

 

I presume that Easyjet, for example only fly where they are making money. I've rarely been on a Gatwick flight that wasn't well filled, other than in the very early days of the service. I have seen the argument that they only do it to keep slots at at Gatwick, but I don't think that holds water because they could very quickly drop IoM and fly a sector that would be profitable.

 

I do think we have had too much capacity on certain routes for operators to make money, but the market has pretty rapidly taken care of that.

Edited by guzzi

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I'm not saying no route ever makes a profit. Obviously not the case. The conclusion is drawn from the perennial transitory nature of operations. Someone tries something for a while and then they're off. So clearly it isn't a licence to print money.

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A full 737/A320 flying to a destination 1-2 hours away makes money. Other sized aircraft and routes are much more financially precarious and a usually relies on busines travel to make a profit.

 

At the present fare levels I therefore have no idea how all our routes don't loose a fortune.

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