Flybe Group's shares surge as airline swings to half year profit

11th Nov 2013 14:36

Flybe Group's shares soared as the airline swung to a profit in the first half on the back of an increase in revenue and cost savings of a restructuring. Pre-tax profit for the six months to end of September came to £13.8m, compared to a loss before tax of £1.6m a year earlier. Group revenue rose 3% to £351.1m from £340.8m as passenger numbers increased by 5.6% to 4.3m and revenue under management grew 20.45 to £477.3m from £396.3m, boosted by contract flying activity in Finland.During the period, the first two phases of the carrier's turnaround was on track to deliver savings of £40m this year and £45m in 2014/15.The load factor, the number of passengers to the number of available seats, jumped 3.6 percentage points to 68.6%. Cost per seat fell 1.3% to £51.30.The company reported an operating cash outflow before restructuring costs of £3.2m compared to an outflow of £4.8m last year. In August Saad Hammad was appointed Chief Executive Officer, taking over from Jim French who moved to a Chairman role before stepping down last week. Simmon Laffin has been appointed non-executive Chairman."I joined Flybe in August this year. It was clear to me that the existing Phase one and two cost savings were necessary, but we simply needed to do more and to do it immediately," said Hammad. "The business needed action now and so today we are explaining our next phase which encompasses a review of everything we do and how we do it. Most of the immediate actions are completed, being implemented or already being consulted on. Unfortunately there is a proposal for further redundancies. "We will consult with the trade unions and employees to ensure that this is done fairly and delivers the right outcome for the business." Shares rose 40.92% to 96p at 15:15 on Monday. RD