Flybe warns of “uncertain outlook” due to French fears and Brexit
Shares in troubled airline Flybe continued to slide today as its boss admitted the outlook for the company is “very uncertain”.
The share price of the Exeter-based airline has more than halved since the start of year and the first quarter results released today failed to arrest such a decline with shares falling over seven per cent in early trading.
The company revealed revenues had increased by five percent and passenger numbers went up by nine per cent in the three months to June 2016. However flights had a smaller proportion of passengers on them. and spend per passenger was down by nine per cent.
Chief executive Saad Hammad referred to the results as “solid progress” but admitted that the company is faced with “significant external challenges”.
French destinations account for 12 per cent of Flybe’s seat capacity and “repeated industrial unrest” in France has hampered performance. In addition, the recent terror attacks could put people off flying to France in the future, although Hammad said: “It is also too early to assess the potential demand impact of recent terrorist attacks.”
Brexit concerns have weighed heavily on airlines since 23 June but the company remained positive that this wouldn’t stop the people wanting to flying to European destinations.
“It is too early to judge the impact of the Brexit vote on Flybe, in the long run, Flybe's mission is unlikely to be affected in a significant manner by the form of the UK's new arrangements with the EU,” the statement said.
However, Hammad did concede that Brexit’s impact on the purse strings of the general public could have detrimental effects.
“We are yet to see the full impact on demand of the devaluation of sterling and the heightened consumer uncertainty after the Brexit vote,” he said.