Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).


For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.


We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.


In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.


We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.


We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.


The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.


Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.


Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.


If you want more information or have any questions or comments relating to our privacy policy please email [email protected] in the first instance.

 Information  X 
Enter a valid email address

Flybe Group Plc (FLYB)

  Print      Mail a friend       Annual reports

Wednesday 23 January, 2013

Flybe Group Plc

Delivery and Future Direction

RNS Number : 1416W
Flybe Group PLC
23 January 2013


Flybe Group plc

('Flybe' or 'the Group')


Delivery and Future Direction


Flybe, Europe's largest regional airline, today announces the setting of medium term operational profit targets and a turnaround plan to return the Group to profitability in 2013/14.


The Group has also today separately announced its Interim Management Statement for the period to 23 January 2013, incorporating its performance in the third quarter ended 31 December 2012, and confirming guidance for the full year.  




·      Significant actions being taken across the Group to restore profitability.

·      The setting of medium term operational profit targets, backed by a clear plan and measurable targets.

·      A restructuring of Flybe Group to create a leaner more focussed business, with the number of divisions reduced to two, Flybe UK and Flybe Outsourcing Solutions.


Flybe UK


·      Announcement of phase one (of a two phase) turnaround plan for the Flybe UK business (and those group activities which support the UK business) - a cost reduction and de-risking plan including proposed headcount reductions of:

c20% in management headcount;

c10% in overhead and production headcount.

·      It is envisaged this will result in a total of c300 roles being made redundant in the business, a c10% reduction in UK based staff (including Isle of Man and Channel Islands), and potentially transferring certain support activities to outsource partners (call centre already outsourced in December 2012). 

·      Management do not currently envisage any significant change to the number of UK bases or its route network at this stage.

·      Reduction in size of Group and Operating Boards.

·      The cost reduction plan should deliver £35 million of savings by 2014/15, and is expected to result in a new slimline business model for the division.  Costs of restructuring are estimated at between £10 million and £12 million, the majority of which will be provided in the 2012/13 accounts.

·      Phase two of the Flybe UK plan will focus on revenue enhancements and on-going business efficiencies.


Flybe Outsourcing Solutions


·      Flybe has developed into the largest independent scheduled contract flying provider in the European regional sector, operating twice the number of flights than its nearest competitors.

·      The new Flybe Outsourcing Solutions business will build upon Flybe's success in European contract flying and drive substantive growth by bringing together the previous Flybe Europe and Aviation Support divisions to provide an integrated outsourcing offer to customers.


There will be a conference call for analysts and investors at 8:30am this morning, and a conference call for media at 11:30am. To register your attendance, please contact Helen Tarbet on 020 7457 2025 or [email protected]


An accompanying presentation will be made available on the investor relations section of the Group's website.





Tel: +44 20 7457 2020

Jim French, Chairman & Chief Executive Officer

Andrew Knuckey, Chief Financial Officer

College Hill

Tel: +44 20 7457 2020

Mark Garraway

Helen Tarbet




At the time of reporting its half yearly results on 8 November 2012, Flybe referred to the company's determination to focus on cost control, revenue growth and improved efficiency in order to counter the challenging economic conditions across the European regional aviation sector. 


This business update, issued in tandem with Flybe's 2012/13 Q3 IMS, lays out a clear short-term roadmap to return the business to profitability, backed by measurable targets and benchmarks, and sets medium term profit targets for both divisions. It addresses the Group's immediate challenges and opportunities by means of:


·      firstly, a cost reduction and de-risking plan which should underpin the return to profitability of the UK scheduled flying business; and

·      secondly, a clear plan to respond to the increasing opportunities available in the European outsourced aviation market and build on Flybe's recent very strong growth in contract flying.


A transparent and measurable medium term plan and the structure to deliver it


In order to drive and deliver the business turnaround, the company will create a leaner and more focused organisation, comprising two divisions to replace the current three. All UK based scheduled services will be managed in Flybe UK, while all outsourced services provided to third party customers including contract flying, MRO services and training, will be brought together under one division, Flybe Outsourcing Solutions. Flybe UK will continue to be led by Andrew Strong and the newly formed Flybe Outsourcing Solutions headed by Mike Rutter.


Flybe has set a medium term annual profit target of £3.00 per seat in Flybe UK and €400k per aircraft in Flybe Outsourcing Solutions. The table below shows Flybe's expected progress towards that target in the first two years of the plan's implementation.


Unit profit targets


Year 1


Year 2


Medium Term

3 to 5 years

Flybe UK (i)

- profit per seat (£)




Flybe Outsourcing Solutions (ii)

- profit per contract flying aircraft (€000) (iii)





(i)         Includes all overhead costs relating to Flybe UK

(ii)        Flybe Outsourcing Solutions includes Flybe Finland, a 60:40 joint venture

(iii)       Includes profits from all outsourcing activities, inc. MRO and training, and all overheads relating to Flybe Outsourcing Solutions


Flybe UK 


Flybe UK will focus on its core activities of flight operations, in-flight service delivery, financial control, commercial delivery and asset deployment. Following the recent successful outsourcing of its Call Centre, all remaining support activities, comprising base maintenance, line maintenance, ground handling and on-board catering will be reviewed and potentially transferred, along with associated staff, to outsource partners. This is expected to create a leaner division whose initial focus will be to implement a cost-based return to profitability. This turnaround will be underpinned by significant business efficiencies, including a proposed c20% reduction in management posts and c10% in overhead and production roles. It is envisaged that this will result in around 300 roles being made redundant, equating to approximately 10% of the current UK based workforce (including Isle of Man and Channel Islands). Consultation with affected staff and their trade unions will commence immediately.


In addition to proposed headcount reduction and outsourcing of support activities, the company is implementing cost reduction plans with suppliers such as airports and maintenance providers, rolling out fuel efficiency programmes and introducing further automation at the check in process. The Group does not envisage that any of its 13 UK operational bases will close at this time and that the UK route network will remain broadly intact. However, the Group intends to conduct a thorough review of its network in phase two of Flybe UK's turnaround plan. It will share the outcome of this review and the detail of further business efficiency projects plus revenue and product enhancement plans at the announcement of the Group's 2012/13 full year results in June 2013.


This phase one cost reduction plan is expected to reduce costs by £35m by 2014/15. The table below shows the detail of these planned changes:



Year 0


Year 1


Year 2


Medium Term

3 to 5 years

Consensus loss per seat (£)







Cost reduction per seat - cumulative (£)

Less - anticipated 'in year' headwinds per seat (£)

Target profit per seat (£)



Target cost reduction (£m)


Further delivery of cost reduction and efficiency

Components of cumulative cost reduction (£m):

-       Business efficiency and cost reductions

-       Supplier costs






Restructuring costs relating to phase one of the turnaround plan are estimated at between £10 million and £12 million, the majority of which will be provided in the 2012/13 accounts.


A number of de-risking actions will also be implemented by Flybe UK, including the sale of four owned aircraft (with two sales already contracted at prices above book value) and the planned removal of 2013/14 growth aircraft. Cumulative actions taken by management since Summer 2012 to de-risk revenue growth (c£10m of annual revenue per aircraft required to cover ownership and running costs) should therefore result in an operating fleet reduction in 2013/14 of seven aircraft versus Flybe's previous fleet plan, thereby removing c£70 million of commercial revenue risk per annum.


In addition to all the above measures, there will be a reduction in headcount on the Group and Operating Boards.


Flybe Outsourcing Solutions


The second structural change to the business involves building upon Flybe's leadership position in short haul aviation outsourcing in order to profit from the anticipated significant growth in European scheduled contract flying over the next few years. Over the last 18 months, driven by the success of the Group's European division, Flybe has developed into the largest independent scheduled contract flying provider in the European regional sector, operating c5,000 flights per month, more than twice that of our nearest competitors.


Flybe strongly believes that pressure on network carriers and small scale state owned airlines to outsource will increase and presents a major contract flying opportunity, along the lines of the US model. The contract flying model delivers predictable income streams per aircraft, with little commercial risk, producing annuity-style earnings. Some 82% of European scheduled contract flying is currently delivered by loss making in-house subsidiaries. Given its success with Finnair, Brussels Airlines and Olympic Air, Flybe believes it is best placed to exploit this rapidly growing sector.


In order to maximise Flybe's opportunity in this market, all of the outsourcing services it offers to customers will be brought together into one division, Flybe Outsourcing Solutions, combining contract flying, MRO and training services. Flybe's scheduled services in the Nordic and Baltic States will also be managed by this division and remain unaffected by today's announcement.


In summary, today's announcement:


·      provides clear short and medium term operational profit targets;

·      sets out a clear plan to return Flybe UK to profitability, based on cost reduction and a new slimline business model;

·      commits to phase two of the plan, including network review, delivery of revenue enhancements and identifying further business efficiencies; and

·      lays out a clear plan to build upon the leadership position Flybe Outsourcing Solutions has created in the European contract flying market to significantly grow the business and increase profitability.


Flybe commits to updating shareholders and stakeholders on the progress of the plan with full reporting on each project, cost and profit target on a six monthly basis at the time of its full year and interim results. 


Commenting on the plan, Jim French, Flybe's Chairman and Chief Executive Officer, said:


"Today's announcement commits Flybe to very clear short and medium term profit targets. To achieve those targets we need firstly to return Flybe UK to profitability. That turnaround will be based upon the detailed cost reduction plan we have announced today and the new slimline business model that will underpin those cost reductions.


"Secondly we need to take advantage of the rapidly growing contract flying market in Europe and fully exploit the leadership position we have created in that market in the last 18 months. The creation of Flybe Outsourcing Solutions will allow us to maximise our position in a market which offers predictable profit and cash flows combined with low risk growth opportunities.


"I am extremely disappointed that many valued and hard-working colleagues may have to leave the organisation. It's a decision the Board and I have not taken lightly; it's one we have tried to avoid and it is the first time in almost 30 years of business that we have had to take such action. Whilst recognising the impact this will have on many of our staff, we will make every effort to minimise the impact and to offer support wherever possible in the transition.


Concluding, Mr French said:


"However, recognising that any significant change to the UK economy or a rebalancing of APD paid by regional and domestic passengers are likely to be some way off, today's announcement represents a clear and realistic plan to return Flybe to profitability, with a measurable timescale and benchmarks based upon significant restructuring and cost reduction. We are committed and focussed on delivery of the plan, continuing to provide strong customer service to more than eight million passengers each year, providing secure and long term employment for those staff remaining in the business and to improve shareholder value.''

This information is provided by RNS
The company news service from the London Stock Exchange

a d v e r t i s e m e n t