A successful turnaround scheme has enabled Flybe to emerge from the red following more than 1,100 job losses, figures released this morning show.
The regional carrier achieved a pre-tax profit of £8.1 million in the year to March 31 against a loss of more than £41 million in the previous 12 months.
Flybe’s UK operations saw passenger numbers rise by 6.9% to 7.7 million despite a 1.4% cut in capacity. The load factor rose to 69.5% from 64.1%.
The airline raised more than £150 million in funding in March in the wake of a major restructuring plan.
The cost cuts led to more than 1,100 job losses as the headcount was reduced by 30%. Further jobs will be cut after the summer as seasonal routes are discontinued and some further aircraft are grounded.
“However, we believe that we are now on the verge of emerging from this period of retrenchment, and looking forward to future considered and careful profitable growth,” chairman Simon Laffin said.
“The early precursors to this have already been announced with additional routes from Birmingham, London Southend and London City.”
He added: “Our decision last year to remove unprofitable routes will continue to impact revenue and profit into 2014/15.
“However our disciplined focus on revenue, cost and organisational discipline, our strengthened balance sheet and growth strategy give the board confidence that we will deliver further improvement in the current year and drive sustainable profitable growth over the coming years.”
Laffin used today’s annual results announcement to attack the government over its stance on domestic Air Passenger Duty.
He said: “Regional aviation is a crucial part of the UK’s transport infrastructure. It is not a luxury. It is an essential part of a modern thriving economy.
“So it remains a source of amazement that the government persists with the arbitrary and discriminatory application of APD, where a typical domestic flight can be charged five times the tax per mile of a long-haul one.
“This is exacerbated when a return international flight suffers this charge once, but a domestic one is taxed twice. Yet in the last Budget, the government actually reduced long-haul APD rates by £1 billion, while informing Flybe that it could not afford to reduce domestic rates.”
Chief executive Saad Hammad heralded 2013/14 as marking the “rebirth” of Flybe.
“We implemented a turnaround plan to stabilise the business and then successfully raised over £150 million net to strengthen our balance sheet and drive sustainable profitable growth,” he said.
“The return to profitability is a great step forwards. This enables us to start implementing our twin-engine strategy of growing our UK branded business and our white label operations across Europe.
“We have made a good start to full year 2015, in line with our expectations.
“We are moving to build on our early success. We have a plan and we have the firepower. The group is now well-placed to become Europe’s best local airline.”