News

Announcement of results for the year ended 31 March 2007

12 November 2007

Flybe, Europe’s largest regional low-cost airline now flying 152 business and leisure routes across the UK and Europe, announces a significant turnaround in its continuing operations*, with a profit before exceptional items and tax of £15.6m, representing an improvement of £20.0m over the prior year. Flybe also confirms the successful operational integration of the BA Connect business.

Financial Highlights

Year ended 31 March	2006/2007 (£M)	2005/2006 (£M)
Turnover*	355.0	304.58
PBT pre exceptionals*	15.6	(4.4)
PBT post exceptionals	4.7	(12.2)
Net Cash	136.3	32.8

* continuing operations represent Flybe operations for the year ended 31st March 2007, prior to the acquisition of BA Connect completed on 5th March 2007.

Operational Highlights

£20.0m improvement in PBT pre-exceptionals from a loss of £4.4m in 2005/06 to £15.6m in 2006/07.
Turnover increased by 16.6% to £355.0m.
5.0 million passengers carried.
Continuing strong growth in ancillary revenues up 63% from2005/06 to 2006/07.
Fleet rationalisation programme on schedule to deliver a two-type environmentally sensitive fleet by 2009.
Flybe in three world firsts: launch customer for Embraer 195 aircraft, introduction of aviation industry’s first eco-labelling scheme, and world’s first airline to introduce baggage charging.

Strategic Highlights

Five year transition programme successfully completed, delivering-

Passenger and turnover growth of over 20% compound per annum.
Passenger volume up from 1.9m to 5.0m.
Route network grown from 41 to 125 routes (end 2006/7).
Nationally recognised brand created.
$3bn of aircraft orders placed.

Acquisition of BA Connect completed with operations successfully integrated

As a result Flybe is on target to deliver its planned £40.0m of cost and ancillary revenue synergies having completed the rationalisation of production facilities in the Isle of Man and Bristol, the closure of the Manchester head office, new beneficial airport deals and having successfully converted BA Connect passengers to Flybe’s high ancillary revenue sales model.
Flybe has delivered turnover growth of over 50% (YTD Oct 07).
Flybe has also successfully sold of all of the Embraer 145 aircraft inherited from BA Connect, and at prices within the funding provided from British Airways for this purpose.
Significant progress has been made to sell the small number of remaining BAe 146s in Flybe’s fleet.
Flybe has placed firm orders for over $3bn of aircraft to fulfil its continuing growth aspirations.

Board and management structures strengthened

Appointment of four Independent Non-Executive Directors.
The strengthening of the Executive Board.

Commenting on the results, Jim French, Chairman, said:

“Since 2002 Flybe has been transformed into Europe’s largest regional low-cost airline. This five year transformational programme has been rewarded this year by a £20.0m improvement in Profit before tax and exceptional items to £15.6m

In 2006/07, the management and the whole Flybe team faced very considerable challenges in acquiring, and then operationally integrating, BA Connect over a very short timescale. This in itself was a remarkable achievement. To have done so whilst also managing to further grow the Flybe business and achieve our highest profit ever was truly outstanding.

The importance of the acquisition of BA Connect cannot be overstated. Flybe is now a much stronger business with good cash reserves, a more balanced network and a significantly reduced risk profile.

Flybe is now the largest regional low cost airline in Europe, employing over 3,000 staff, expected to carry 7 million passengers this year and operating over 400 flights each weekday.

As the largest regional low-cost airline in Europe, cash in the bank and a new fleet- we are in a hell of a position to go forward!”