The chief executive of Flybe hailed the carrier’s “rebirth” yesterday after a turbulent period in which more than 1,100 staff left the business.
Saad Hammad who joined the ailing firm last August said a return to profit in the year to March 31 showed the regional airline group had made great strides since booking a £41.1 million loss in 2013.
The company’s £8.1 million pre-tax profit, the first for four years, came on the back of a major restructuring that saw it dramatically downsize its workforce and shrink its number of operational bases from 13 to seven.
Total revenues under management grew by 11.1% during the year to £868.4m, while group sales excluding joint venture income were marginally ahead of the £614.3m of 2013 at £620.5m.
“We implemented a turnaround plan to stabilise the business and then successfully raised over £150m net to strengthen our balance sheet and drive sustainable profitable growth,” said Mr Hammad.
“The return to profitability is a great step forwards. This enables us to start implementing our twin-engine strategy of growing our UK branded business and our white label operations across Europe.
“We have made a good start to FY15, in line with our expectations.
“We are moving to build on our early success. We have a plan and we have the firepower.”
The firm carried a record 7.7 million passengers on its UK scheduled services in the period, a rise of 6.9%.
Flybe pulled out of Dundee Airport in December 2012 but returned to the city earlier this year to operate a new London Stansted route on behalf of franchise partner Loganair on an interim basis.
The UK Government announced earlier this week that it was to provide funding for the airlink for another two years, through a £2.85m public service obligation agreement with Dundee City Council.
Flybe confirmed yesterday it would continue to operate the route under the terms of the franchise and would use a special ‘City of Discovery’ liveried aircraft.
Chairman Simon Laffin said it had been a “momentous year”, with a major fund-raising and a relaunch of the Flybe brand set against the “sad” loss of more than 1,000 people from the firm’s workforce.
Mr Laffin said the turnaround effort had “put a great deal of strain on many employees” and said the board wished to pay tribute to those who had shown huge commitment to the task of restoring Flybe to financial and commercial health.
However, despite his optimism that the airline was “on the verge of emerging from this period of retrenchment”, Mr Maffin confirmed that further planned job losses would go-ahead this summer and more aircraft would be grounded.
“The general economic outlook in our most important market, the UK, has improved,” Mr Laffin said.
“While this provides an encouraging backdrop, it is important we continue to ensure Flybe does not depend on positive macro-economic conditions for its future success.
“Our decision last year to remove unprofitable routes will continue to impact revenue and profit into 2014/15,” he added.
“However, our disciplined focus on revenue, cost and organisational discipline, our strengthened balance sheet and growth strategy give the board confidence that we will deliver further improvement in the current year.”
Despite the upbeat tone, investors were not impressed and shares in Flybe fell 1.79% to close the day down 2.50p at 137.50p.