Low-cost, regional airline Flybe has reported half-year profits down almost a half (47%). The company said the slump in profits was down to higher-than-expected aircraft maintenance and IT costs.
The firm, which had warned the City about interim earnings last month, posted underlying pre-tax profits of £8.4m for the six months to end of September, down from £15.9m a year earlier.
However shares edged higher in early trading as the result came in towards the top end of the range given in the group’s October profit alert, when it had said profits could fall by up to 69%.
The airline’s results were affected by a drive to improve the reliability of its planes, in particular the Bombardier Q400 turboprop, as well as additional IT costs of £6m linked to the development of a new digital platform. A weaker sterling during the period was another headwind to contend with.
Chief executive Christine Ourmieres-Widener said: “While half-year profits are lower than last year, due to the one-off IT contract costs, higher maintenance expenses and the impact of the fall in the value of sterling, I am confident that we are on a clear path to sustainable profitability through the investments and improvements we are making at Flybe.”
She added that the group would focus in its second half on improving its cost base and reliability performance, as well as ploughing on with investment in its new online system.
But Flybe – which carries around 8.8 million passengers across 199 scheduled routes – warned the European airline market remains “challenging”.