The company has reported a pre-tax loss of £40.7 million for the year, compared with the previous year’s loss of £6.2 million. The loss was despite the company claiming to have exceeded a cost-saving target of £25 million, including a reduction to its UK staff of 20 percent, and a five percent pay cut that was agreed with its pilots.
The cost-saving effort is continuing in the current financial year, with the company having sold its takeoff and landing slots at Gatwick to Easyjet, as well as postponing the delivery of 16 new aircraft.
In a statement, Flybe levelled some optimism at measures being taken to devolve Air Passenger Duty (APD) policy to the UK regions, and at moves towards a more structured UK aviation policy. It said that the company and its customers would benefit significantly from these developments.
Jim French, Flybe’s chairman and chief executive, said, ‘Flybe has exceeded its target of taking out £25 million from its cost base during 2013/14 and will deliver around £40 million in savings in this current financial year, expected to rise to £50 million annualised savings from 2014/15 onwards.
‘In the last few months we have streamlined the business, reducing UK-based headcount by more than 20 percent. We have also made major progress in reducing the cost of our supplier base.’
He blamed the APD tax for the company’s decision to exit Gatwick, saying that it, ‘acted as a clarion call for action and debate on the injustice of the grossly unfair ‘double hit’ nature of the APD tax on the UK regions’.
He said, ‘the plans being developed in Edinburgh, Cardiff and Belfast are aimed at reducing this burden, and bode well for our customers, the regional economies we serve and Flybe itself. We will support these developments and work closely with those seeking to bring about change.
‘Our results for 2012/13, while expected, are nonetheless disappointing. During the year, we have taken difficult decisions as part of our turnaround plan, which have affected all our people. Challenging as they have been, these decisions were critical to ensuring the future success of Flybe.
‘We expect to see considerable reductions in the cost base of the business in both this year and the next, thanks to the actions taken during the course of 2013 that are targeted to be complete later this year. The group is now more strongly placed for the future.’