Flybe puts itself up for sale in tough market

Roman Schwartz
November 16, 2018

Flybe's share price soared 28 per cent this morning as the budget airline confirmed it is seeking a sale after revealing plunging profits.

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, and flies to destinations across the United Kingdom and Europe.

The Exeter-based airline - which flies routes from the Island including Liverpool, Manchester and Birmingham - said last month that it expected to lose twelve million pounds this year.

The group is in talks with a number of "strategic operators" about a potential sale and has hired Evercore as adviser to help with the review and sale process.

The group has 78 planes and serves around eight million customers a year.

The airline's shares have fallen by nearly 75% since September.

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It comes weeks after Flybe warned over profits following falling demand and a £29 million hit from rising fuel costs and the weak pound.

Shares in Flybe jumped as much as 44% on opening, before paring back to stand 11% higher. However, due to Flybe reducing capacity across its fleet, passenger revenue per seat increased by 7.9 per cent.

In 2011, the company named one of its Q400 aircraft in memory of Adam Stansfield and, at the start of the last season, they launched a special Flybe-inspired kit during City's 2-0 win over Grimsby at St James Park.

Th company blamed the weaker results on external factors, citing the weaker value of sterling and higher fuel prices had driven up the cost per seat, which together with a softening of market growth, had affected profitability within the European short-haul aviation market.

This is already starting to have a positive impact, as shown by the improved first half adjusted profit before tax; however, we must do more in the coming months.

The Group is undertaking a comprehensive review of various strategic options, including further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources, as well as a potential sale of the Company.

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