The dramatic improvement in Flybe’s sales over the past 12 months to March 2008 is particularly striking in such troubled times for the airline and travel industry.
Flybe’s ambitious acquisition of BA Connect last year has transformed the business into one of Europe’s largest regional airlines, now operating 500 flights a day from 34 British and 29 mainland European airports. The company recorded sales of £535.9m to March 2008, against £367.5m the previous year.
Rising fuel prices and the economic slowdown have claimed several airlines in recent months including XL, Zoom and Oasis. But Flybe has achieved remarkable success in a competitive market by positioning itself not as a budget carrier but as a regional airline for business and other regular travellers.
Following its acquisition of BA’s low-cost European carrier, Flybe serves regional and island communities from Stornoway in the Outer Hebrides to Split in Croatia and Malaga in Spain.
The airline is committed to serving geographically remote locations, but it has also chosen routes that have minimal competition from other modes of transport. Around four-fifths of Flybe’s 190 routes cross water, and none can be completed by road or rail within three hours.
Flybe has also worked hard to retain BA Connect’s corporate customers by introducing services designed to appeal to the business traveller such as access to executive lounges and greater ticket flexibility. Now, less than 10% of routes are aimed primarily at the cash-strapped European leisure market.
Over the past 12 months chief executive and chairman Jim French has rationalised the merged companies, stripping out over 20% of the combined capacity, including offices in Birmingham and Manchester and loss-making flight operations in Bristol. The company, based in Exeter, has also invested heavily in phasing out older and smaller aircraft and building amore fuel-efficient fleet. Together, the changes have led to cost savings and synergies which the company puts at £40m.
Looking ahead, Flybe, which is majority-owned by the Rosedale family trust of the late steel magnate Sir Jack Walker, and by its staff, believes industry consolidation will continue. With cash reserves of £67.4m, the airline is well-placed for further growth.
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