Flybe Targets Lower Costs Amid Strategic Review as Managers Exit
Stock Chart for Flybe Group PLC (FLYB)
Flybe Group Plc (FLYB), Europe’s largest independent regional airline, said new Chief Executive Officer Saad Hammad will seek to reduce costs by unifying units after managers overseeing the previous strategy departed.
“It has quickly become clear to me that Flybe’s prospects will be significantly enhanced by disbanding the existing divisional structure and integrating all operations into a single, simpler and lower-cost operating unit,” Hammad, who previously worked at discount carrier EasyJet Plc (EZJ), said in a statement today. The strategic review is to conclude in November, Hammad said.
Flybe U.K. and Flybe Outsourcing Solutions will be dissolved and integrated into one operation, the Exeter-based airline said in the statement.
The review follows a management shake-up that saw Hammad take over from outgoing CEO Jim French, who became non-executive chairman, and Paul Simmons named new chief commercial officer from Oct. 28. Management is targeting 40 million pounds ($63.8 million) of cost savings in fiscal year 2014.
Andrew Strong, managing director of Flybe U.K., and Mike Rutter, who oversaw the Outsourcing Solutions unit left their jobs on Friday along with Director of Corporate Strategy Mark Chown, the airline said. Flybe is also seeking a new chief financial officer after announcing the departure of Andrew Knuckey on Aug. 5.
Flybe said that Matt Bennett, the current director of Internal Audit and Risk will also act as director of special projects. Director of Aircraft Maintenance John Palmer will serve as interim operations chief until a replacement is found.
Britain’s biggest domestic airline is seeking to bolster its balance sheet amid reduced demand and high fuel prices. The company sold landing slots at London Gatwick airport to EasyJet Plc for 20 million pounds, is renegotiating pilot pay, and has delayed deliveries of regional jets from Embraer SA. (ERJ)
Shares in Flybe have advanced 75 percent this year, giving the airline a market value of 66.9 million pounds.
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