Flybe Trims Job Cut Plan as Economic Rebound Underpins SavingsRobert Wall
Flybe Group Plc, Europe’s largest regional airline, said cost cuts and an improving U.K. economy will allow it to reduce job losses by 10 percent as Chief Executive Officer Saad Hammad focuses on profitable routes.
The carrier has pared job cuts to 450 positions from 500 forecast in November after deciding to continue some services it was going to cut, Hammad said in a phone interview. Success in cutting costs has made those services viable, he said today.
Hammad, a former EasyJet Plc chief commercial officer, joined Exeter, England-based Flybe in August to restore profitability, and committed to cease operating unprofitable routes. The carrier has delayed plane deliveries, cut pilot pay, and sold slots at London Gatwick airport to EasyJet.
“We are seeing the economy improving at the regional level,” Hammad said. “Significant progress” has been achieved on restructuring the carrier, he said.
Sales in the third quarter were 142.9 million pounds, close to the level of a year earlier, Flybe said in a statement today. Per seat costs fell 5.2 percent for its U.K. airline operations excluding fuel and restructuring.
Flybe shares advanced as much as 4.5 percent and were trading 3.1 percent higher as of 9:22 a.m. in London.
The airline, which is discontinuing 30 routes, looked at more than 100 others before picking nine to be added this year, Hammad said. The expansion focuses on routes not served by others, including Birmingham to Cologne, he said. “We want to clearly have maximum defendability.”
Flybe said it will also connect Birmingham, its largest base, with the Florence airport, which is size-constrained and difficult for discount rivals EasyJet and Ryanair Holdings Plc to access. The regional carrier said it has no route overlap with Ryanair, Europe’s largest airline, which today said fare cuts have spurred sales.