Flybe nosedives on profits warning

[Capt_Mainwaring]

3 hours ago, LightBulb said:

Flybe operate the old Dash 8 Q400`s` which are old, high maintenance, and arn`t fuel efficient, compared to the Airbus A320, so unless they can replace the fleet with more modern aircraft, they will never make money, unless they can change,

Turboprop is much more fuel efficient than turbofan. Hence why regional carriers like flybe, Qantas link and a lot of other commuter flights operate using turboprops.

[ballaughbiker]

Quote

Turboprop is much more fuel efficient than turbofan

Considerably so with very short sectors which obviously means much lower cruise level (and time).

[snowman]

Tomorrow’s Times “Flybe will tell the government that it needs a £100 million loan to survive the winter, on top of the £106 million tax bill deferrment it has received”

 

Edited January 24, 2020 by snowman

[snowman]

1/24/2020 Flybe owners seek government loan of £100m | Financial Times

https://www.ft.com/content/782da316-3ea8-11ea-b232-000f4477fbca

Tanya Powley and Jim Pickard 5 HOURS AGO

Flybe’s owners are seeking a £100m short-term loan from the UK government as part of the agreed rescue deal of the troubled regional airline, the Financial Times can reveal.
A decision on whether the government will provide the loan is expected within the next two weeks, according to people with knowledge of the discussions.

As part of the deal, Flybe’s owner, Connect Airways — a consortium of Virgin Atlantic, Stobart Air and Cyrus Capital — has agreed to make a further capital injection into the airline, on top of the £30m it has already promised to invest in the coming weeks. The investment is expected to be another £20m, according to the people.

A loan would be a major government intervention, which is unusual for a Tory administration. The government has previously stressed that any loan to Flybe would have to comply with EU state aid rules. That means it would either have to be a short-term facility aimed at rescuing and restructuring the company — or it would have to be provided on the same commercial terms as a bank would offer.

Mark Anderson, chief executive of Flybe, indicated last week that the loan would be on commercial terms. “We are in conversation with the government around a financial loan — a loan, not a bailout — a commercial loan, but that is the same as any loan we’d take from any bank,” he told staff. “The government will not lend if they do not believe there is a credible plan. No one is going to throw good money after bad.”

There is no guarantee that the government will accept Flybe’s request for £100m, given it has not intervened in other recent cases, such as the collapse of Thomas Cook, the UK package holiday operator. Last week the government agreed a multi-pronged rescue deal for Flybe, including a short-term deferral of less than £10m of its air passenger duty (APD). That delay came through an existing HM Revenue & Customs scheme called “Time to Pay”, which is used by hundreds of thousands of companies every year. The government has also pledged to review APD for all UK domestic airlines with the aim of improving regional connections, with an announcement expected in the March Budget. But ministers are facing a challenge to achieve the reductions in APD while pledging to help curb Flybe Group emissions in the sector to help hit the UK’s target of becoming a “zero net carbon” country by 2050.

Ministers said they would discuss a loan to Flybe but have refused to talk about the size of the potential facility. But prime minister Boris Johnson is under pressure to rescue the airline because of his promise to “level up” the UK regions. Flybe is a key regional carrier delivering the majority of flights in and out of certain airports including Newquay, Anglesey and Southampton and its failure would have a detrimental impact on connectivity between different parts of the country.

The government’s attempts to salvage Flybe, which has struggled to achieve profitability, have led to the threat of legal challenges from rival airlines. Flybe’s load factor — the average number of seats filled on its aircraft — has typically hovered between 61 per cent and 75 per cent over the past decade, much lower than that achieved at its larger low-cost rivals easyJet and Ryanair.

Edited January 24, 2020 by snowman

[snowman]

So, they need a £100 million loan in order to get through the next 9 weeks !

[Derek Flint]

So a bank won’t touch them by the look of it. 

I hope this pans out OK

Edited January 25, 2020 by Derek Flint

[snowman]

26 minutes ago, Derek Flint said:

So a bank won’t touch them by the look of it. 

I hope this pans out OK

Exactly

[Amadeus]

https://twitter.com/EasternAirways/status/1220718662467956737

[2112]

This pile of shite on the Nations Propaganda Mouthpiece -

https://www.manxradio.com/news/isle-of-man-news/flybe-seeking-100m-loan-according-to-reports/

why was it written as it’s old news?

The way is written, and coming from IOMGs arsehole, am I to believe that IOMG are contributing towards any form of bailout? I am sorry but I feel that news article, days/week after the event is confusing to say the least. I do understand the consequences of a collapse of Flybe to the local economy etc.

[Andy Onchan]

2 minutes ago, 2112 said:

This pile of shite on the Nations Propaganda Mouthpiece -

https://www.manxradio.com/news/isle-of-man-news/flybe-seeking-100m-loan-according-to-reports/

why was it written as it’s old news?

The way is written, and coming from IOMGs arsehole, am I to believe that IOMG are contributing towards any form of bailout? I am sorry but I feel that news article, days/week after the event is confusing to say the least. I do understand the consequences of a collapse of Flybe to the local economy etc.

The £100 million they're looking for is over and above what UKG had already promised them, ie further time to pay the APD.

[Uhtred]

I suspect very strongly that, sooner or later, FlyBe are going to fold. Probably sooner.

[Roger Mexico]

26 minutes ago, 2112 said:

This pile of shite on the Nations Propaganda Mouthpiece -

https://www.manxradio.com/news/isle-of-man-news/flybe-seeking-100m-loan-according-to-reports/

why was it written as it’s old news?

There's only two facts in that and they're both wrong.  Firstly Flybe doesn't "account for almost 50% of flights to and from IoM", it's only just over 40%[1] and the  "£106 million air passenger duty bill" is almost certainly an over-estimate.  Both have been discussed on here.

 

[1]  Admittedly they forgot to put the percentages in this year, presumably Manx Radio's enormous subvention doesn't stretch to a pocket calculator.  Or maybe they're afraid to do even simple maths without the approval of their paymasters.

[Andy Onchan]

I wonder how much IOMG are owed, assuming the airport actually invoices the services to FlyBe: https://www.cityam.com/flybe-looks-for-another-tax-delay-weeks-after-government-saves-airline/

[Manxberry]

Well, we can calculate a ballpark for the max annual liability there, though it's likely to be much less as they have to pay monthly (unless a deal has been done by an idiot): 

APD https://www.gov.im/media/1368034/yearly-air-traffic-summary-jan-to-dec-2019.pdf

349289 passengers annually or approx 175000 departing passengers, paying £13 APD on an annual basis, is £13 x 175000 = £2,275,000

Landing Fees / Extension Charges / Passenger charges (Guesswork due to route deals so I'll low ball it, as they don't pay the ones in the pdf) https://www.gov.im/media/239757/airport_fees_charges_from_april_2014.pdf

Liverpool: 56000 annual departures @ £3 a passenger = £168,000 
Manchester: 86000 annual departures @ £5 a passenger =£430,000
Birmingham: 21000 annual departures @ £5 a passenger = £105,000
Heathrow (Short season): 9000 annual departures @ £5 a passenger = £45,000
Geneva (Seasonal): 1000 annual departures @ £5 a passenger = £5,000

Total

£3,028,000 Annually
Or ~£250,000 monthly

Not the end of the world if it's just a couple of months extension (though I agree with you Andy Onchan they're probably bust in a few months unless they get a massive cash injection).

Now don't forget on the other side, the IOM government has approximately 17,000 patient transfers a year @ ~£250 per return which comes to £4,250,000 going the other way... Five people working in that patient transfer office, and yet they still send the bookings to a travel agent to book which takes a cut rather than doing them themselves... Retarded.

 

[Andy Onchan]

UKG and airports should say no and call their bluff. The shareholders need to dig deeper.

If the banks say no, then so should UKG otherwise it's not going to be considered a "commercial" loan, is it? It will be what it is, a government subsidy/bailout.