Flybe In Talks With Buyers About Potential Sale
British regional airline Flybe has announced it is in talks with potential buyers as it grapples with higher fuel costs, lower demand and a weak British pound.
Airlines have been looking to consolidate in many markets as a result of rising running costs, largely higher fuel prices, and increased competition from budget carriers. Icelandair agreed to buy rival WOW air last week.
Flybe's stock plunged after a profit warning last month, underscoring challenges that are also affecting bigger European rivals including Ryanair Holdings Plc Wizz Air Holdings Plc and easyJet Plc.
Flybe, which has 78 aircraft in its fleet, said it was in talks with a number of potential buyers, without giving details.
While there has been some consolidation in Europe over the last year, with Lufthansa and easyJet acquiring parts of failed Air Berlin in 2017, the CEOs of the continent's biggest airlines say more is to come, particularly if oil prices remain high.
Exploring Other Options
But Flybe said it was also looking at other options, such as further reductions in capacity and costs.
The company said it planned to cut capacity by around 3% in the second half of its financial year.
It has already reduced its fleet size, focused on profitable routes and cut costs as it pushes ahead with investments in a new digital platform. It has been hedging fuel costs and foreign exchange risks too.
Flybe said it was also exploring a possible move to a standard London Stock Exchange listing, from its current premium listing, saying that would give more flexibility on divestments.
British infrastructure and support services company Stobart Group scrapped plans to buy Flybe in March after being rebuffed.
Profit And Sales
Flybe reported a 49% rise in adjusted profit before tax for the six months that ended on September 30.
Forward sales rose in the third quarter, with 63% of seats sold, versus 59% a year earlier. Seat capacity fell 6%, while passenger revenue per seat rose 2%
Flybe said it was developing Brexit contingency plans, including potentially reassigning contracts that could be directly affected.