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Thread: Flybe Hit By Increased Maintenance Costs

  1. #1
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    Lightbulb Flybe Hit By Increased Maintenance Costs

    ATW Online; Wednesday 18 October 2017
    Flybe gives profit warning on increased maintenance costs

    UK-based regional airline Flybe has warned that its interim profits will be lower than expected, following an unexpected rise in maintenance costs in the first half of its financial year.

    In a statement issued to the London Stock Exchange Oct. 18, the Exeter-based carrier said that, following a detailed review of its aircraft maintenance activities, it had incurred higher than expected related costs in the first half.

    The rise in expenditure “reflects the drive to further improve the reliability of its aircraft, particularly the Bombardier Dash 8 Q400 turboprop, with improvements already being seen,” the statement said.

    “A full review of the maintenance strategy has now been launched which aims at a significant improvement of aircraft performance and costs.”

    As a result, adjusted profit before tax (PBT) was expected to be in the range of £5 million to £10 million ($6.6 million to $13.2 million) for the first half compared to an adjusted PBT of £15.9 million for the corresponding period a year ago.

    The reduced figure came “after charging the additional IT costs, as previously announced, of around £6 million in the first half of this year related to the development of a new digital platform.”

    A spokesman for the company told ATW that a combination of factors had resulted in the profit warning, including the size of the airline’s fleet peaking earlier this year, with more maintenance being incurred on the larger number of aircraft. The fleet was now reducing as aircraft came to the end of their leases and were handed back.

    The increased maintenance had been instituted to push up technical dispatch reliability, which “had dropped a little bit.” The additional maintenance costs were by their nature expected to be a short-term phenomenon and the company was already starting to see signs of improvement. He could not give technical details of the maintenance required, but more details were likely to be available at the airline’s half-year announcement on Nov. 9.

    “While half-year profits are lower than expected, I am confident that we are still on a clear sustainable path to profitability in line with our stated plan,” CEO Christine Ourmieres-Widener said.

    “The increased maintenance costs are disappointing, but we are already addressing these in the second half and remain focused on improving our cost base and reliability performance. Our Sustainable Business Improvement Plan is delivering benefits with the fleet size now reducing, and consequently both yield and load factors are increasing. The net debt, as expected, remains broadly in line with year ended 31st March 2017.”

    By: Alan Dron
    NS Comment: Wonder what was disturbing the Q400s this time around.
    I love this job

  2. #2

    Default Re: Flybe Hit By Increased Maintenance Costs

    Didn't flybe make a whole bunch of maintenance redundant in favour of outsourcing?

  3. #3
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    Default Re: Flybe Hit By Increased Maintenance Costs

    Long gone are the days when small airlines were run by aviation enthusiasts or at least with a background in aviation. Its all bean counters and corporations dedicated to management speak meetings.
    The Higher the Fewer

  4. #4
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    Default Re: Flybe Hit By Increased Maintenance Costs

    Bean counters quantifying maintenance costs should always listen to that old adage: "If you think aircraft maintenance is expensive, try an accident".
    God created aircraft mechanics so that pilots can have heroes too.

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