Flybe reopens Aberdeen base but shares drop after H1 loss

12th Nov 2014 10:46

UK low-cost airline Flybe Group has announced it will be reopening its base in Aberdeen next March after pulling out of the terminal in 2010.The group will also launch a new route to and from London City Airport and open a new base in Bournemouth.However, Flybe saw its share price drop on Wednesday by 18% after saying it swung into the red in the first half.Results were affected by £34.3m of one-offs and revaluations, including a £6m provision for EU 261 regulation flight-delay compensation and £9.9m of impairments in Finland.Despite a 8.7% increase in UK passenger revenue per seat during the first six months of the year, revenues dropped 12.3% to £307.8m.Flybe went from reporting a pre-tax profit of £13.8m last year to a loss of £15.3m this year, with a loss per share of 7.1p.Nevertheless, cash and equivalents rose to £149m from £19.1m after the UK business became cash generative.The company said it will be selling its 60% stake in a Finnair joint venture stake for €1 after a continuing decline in the domestic Finnish passenger market.Chief executive Saad Hammad said the group entered the winter season with "solid momentum" in its core UK business."Though our business transformation is far from complete, we are seeing the benefits of improved commercial execution with the right cost base and we now have improved operational and financial disciplines throughout our organisation," he continued.Liberum analysts said: "The interim results were below our forecasts, but distorted significantly by several one-off issues as Flybe continues to deal with its legacy challenges."Despite this, we continue to see recovery potential. We retain our 'buy' recommendation but cut our target price to 180p from 190p."Shares were down 17.74% to 108.38p at 12:27 on Wednesday.