Flybe nosedives after profit warning
Shares of Northern Ireland's biggest airline Flybe plunged 21.5% after it warned of a 'significant shortfall' on third quarter revenue expectations this year.
Shares of Northern Ireland's biggest airline Flybe plunged 21.5% after it warned of a 'significant shortfall' on third quarter revenue expectations this year.
The group said demand for travel in its main UK market is deteriorating and the group blamed particularly poor sales in December for the shortfall in third quarter sales expectations.
UK domestic air travel, which represents around 70% of Flybe UK activity, continued to deteriorate, from an underlying 6% decline in the first half to an 8% drop by the end of the third quarter.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"It is not expected that the Q3 2011/12 shortfall in revenue will be recovered during the remainder of the 2011/12 financial year. Based on latest sales trends, we believe that challenging market conditions will continue for the rest of the financial year to 31 March 2012," Flybe said in a company statement.
The group added that it has maintained its yields at last year's levels, rather than increasing them as previously planned, thereby maintaining volumes and growing market share.
Commenting on the decision to not push through fare price increases, chairman and chief executive officer Jim French said, "The UK domestic market is clearly challenging. Under such circumstances, notwithstanding the shortfall against our revenue expectations, I believe that maintaining volumes and growing market share at the expense of planned yield increases was the correct decision to protect the long term potential of Flybe."
cj
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
8 of the best properties for sale near ski slopes
The best properties for sale near ski slopes – from a luxury cabin in Geilo, one of Norway’s premier ski resorts, to a large chalet in Valais, Switzerland
By Natasha Langan Published
-
Cash hoarders take total UK savings to £2 trillion – why aren’t we investing?
Investment-shy Brits are hoarding huge amounts of cash in their savings accounts. We look at the case for saving versus investing.
By Katie Williams Published