Gamble of the week: compelling budget airline

This British airline has seen its share price tail-spin earlier this year, but now looks well placed to weather the storm of volcanic ash clouds and rising oil prices, says Paul Hill.

Flybe shares slid by 25% after a profits warning on 5 May. This was triggered by high jet fuel prices and a slowdown in leisure travel in February and March. But I think that this British no-frills airline is a value play.

Firstly, overall trading was nowhere near as bleak as the sell-off suggests. In fact, even though the load factor (a measure of how full its 68 planes are) fell by 4.4% for the three months to March, revenue per seat rose by 2.2% to £46.14. Better still, passenger yields remained strong (up 10.5%), thanks to robust business demand, and ticket sales for the summer season were ahead by 5.4%.

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Paul gained a degree in electrical engineering and went on to qualify as a chartered management accountant. He has extensive corporate finance and investment experience and is a member of the Securities Institute.

Over the past 16 years Paul has held top-level financial management and M&A roles for blue-chip companies such as O2, GKN and Unilever. He is now director of his own capital investment and consultancy firm, PMH Capital Limited.

Paul is an expert at analysing companies in new, fast-growing markets, and is an extremely shrewd stock-picker.