London: British carrier Flybe Group Plc posted its first pretax profit in four years, beating analyst estimates, as it exited unprofitable routes and grounded surplus aircraft.
But the company’s shares, which rose about four percent in early trading, reversed course to drop as much as seven percent yesterday after Lufthansa AG warned that prices on European routes were being pressured by Gulf airlines. European airlines are being squeezed by a combination of cost-conscious flyers, soaring fuel costs and higher airport charges.
Robin Byde, an analyst at Cantor Fitzgerald Europe, said there may be some downward revisions of forecasts for Flybe after Lufthansa’s warning.
Analysts on average expect Flybe to report an adjusted pretax profit of £20.02m ($33.6m) in the year ended March 2015, according to Thomson Reuters I/B/E/S.
Flybe, whose investors include billionaire financier George Soros, launched a turnaround programme last January, cutting costs by giving up airport slots, slashing jobs, exiting unprofitable flight routes, and grounding surplus aircraft.
The company is also revamping its image by repainting its planes purple from white, updating interiors and introducing new staff uniforms.
The budget carrier swung to a pretax profit of 8.1 million pounds in the year ended March 31.
Reuters
