Losses increased at Cardiff Airport as the business was hit by the departure of airline operator Bmibaby.
A 2011 operating loss of £302,000 had grown to £1.7m loss a year later while pre-tax losses increased year-on-year from £924,000 to £2.38m.
Turnover at the airport, which announced in March it had struck a £52m buyout deal with the Welsh Government, fell from £16.7m to £14.8m for the year to 31 December 2012.
Notes accompanying the newly filed accounts for Cardiff International Airport Ltd said passenger numbers fell by 16 per cent during the year to 1.02 million, “largely due” to the withdrawal of Bmibaby from the airport in October 2011.
Looking ahead, the report said: “Despite a further fall in passenger numbers during 2012, there are signs the next annual movement in passenger numbers will be positive, with growth expected in low cost and charter activity during 2013.”
Chief executive Jon Horne said: “We are optimistic about the future potential of the airport having recorded our fourth month of growth in passenger numbers.
“August figures show passenger numbers totalling 148,220 for the month which is an increase of 14 per cent over August 2012, continuing the trend of May, June and July.
“We have already announced increased services for both summer and winter 2013 and are working hard to get more airline capacity in place.
“We are confident we shall continue to make progress this year and remain focused on delivering more capacity and an improved route network for the people of Wales.”
Sourced by Inside Media
A pre-tax loss of £40.7 million was reported this morning by Flybe against £6.2 million in 2011/12.
The struggling regional airline said cost savings of £25 million in the first phase of a turnaround plan had been exceeded as it cut UK staff numbers by more than 20% and pilots agreed a 5% pay cut
A further £30 million of savings are being targeted for the current financial year
The airline is selling its Gatwick take off and landing slots to easyJet for £20 million and has deferred delivery of 16 Embraer E175 regional jets.
Flybe said it welcomed “growing political momentum” to devolve Air Passenger Duty policy to the UK regions, as well as growing pressure to create a more coherent regional aviation policy for the UK as a whole.
“Flybe and its customers would be significant beneficiaries of both of these developments,” the airline said.
Chairman and chief executive Jim French 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%. We have also made major progress in reducing the cost of our supplier base.”
He claimed that its decision to exit Gatwick “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”.
French 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.”
Sourced from Travel Weekly
Total cash was £54.7m at 31 March 2013 (2012: £67.6m), and net assets of £48.1m (2012: £89.4m).
Target cost savings of £25m under Phase 1 of turnaround plan were exceeded, with £30m of annual cost savings now secured for year 2013/14 onwards.
Phase 2 of the plan is being implemented, targeting a further £10m of savings in 2013/14, rising to around £20m from 2014/15. This would take total annual cost savings to some £50m from 2014/15 onwards.
UK based head count is being reduced by more than 20%.
Agreement in principle has been reached with the British Airlines Pilots Association (‘BALPA’), for up to a 5% reduction in salary in return for extra time off.
The turnaround plan is being financed through:
® The transfer of arrival and departure slots at London Gatwick Airport (‘LGW’) to easyJet for £20m, subject to a simple majority shareholder approval; over 54% of shareholders have given their irrevocable approval to the transaction;
® The deferral of 16 Embraer E175 (E-series regional jet) aircraft deliveries, saving £20m of cash outflow for pre-delivery payments in winter 2013/14;
® The disposal of various other minor assets.
Update on ‘Delivery and Future Direction’
The actions taken so far under Phases 1 and 2 of Flybe’s turnaround plan, Delivery and Future Direction, are now expected to deliver some £40m of annual cost savings in 2013/14 (against the original target of £25m), and targeted to reach an annual savings figure of around £50m by 2014/15 onwards.
Jim French CBE, Chairman and CEO, stated:
“Flybe has exceeded its target of taking out £25m from its cost base during 2013/14 and will deliver around £40m in savings in this current financial year, expected to rise to £50m annualised savings from 2014/15 onwards. In the last few months we have streamlined the business, reducing UK-based headcount by more than 20%. We have also made major progress in reducing the cost of our supplier base.
“Our announcements on 23 May 2013 have 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. 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.
“As outlined above, our turnaround plan has involved considerable efforts to reduce the cost base of the business. Inevitably, and sadly, this process has to date involved the departure of around 490 people from the business. We do not underestimate the effect of these difficult decisions on those staff leaving and the friends and colleagues that they leave behind.
“I would like to thank all of our employees, staff and union representatives for their hard work, support and resilience through what is proving to be a very challenging period for the business and its staff.
“Flybe remains Europe’s largest independent regional airline, flying over 200 routes from more than 100 airports across 23 countries. We have a leading brand, a strong reputation for service excellence and a standing amongst our peers that means we can, and do, undertake business with all the major airline groups in Europe. We continue to make real and measurable progress in Europe, with our contract flying business in particular being a stable, income-generating entity which is well positioned for further growth. With Flybe’s future cost base significantly improved, the business will now move to reclaim its position as Europe’s leading regional airline.”
Story provided by StockMarketWire.com
Virgin Atlantic has reported an increase in annual losses despite a rise in revenue in the year to February.
The carrier lost £93 million, up from £80 million a year earlier. However Virgin Atlantic’s group pre-tax loss was lower at just under £70 million thanks to a one-off exceptional item and a profit at Virgin Holidays.
The airline blamed rising costs and tough economic conditions for the losses, but announced a 5% increase in annual revenue to £2.87 billion.
Passenger numbers rose year on year by 188,000 to 5.5 million.
Airline chief executive Craig Kreeger said: “Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which . . . severely dented demand for business travel.”
Kreeger, who took over running Virgin Atlantic in February, has pledged the airline will turn a profit in two years.
He reported a 9.2% rise in premium economy and Upper Class passengers year on year, coupled with an overall rise in load factors.
Virgin Atlantic is now 49% owned by US carrier Delta Airlines, which bought out Singapore Airlines’ long-held stake in December.
Kreeger said: “Virgin Atlantic has a programme of measures which I’m confident will improve our financial performance considerably and put us firmly on the road to a return to profit in spring 2015.”
The carrier launched its first short-haul and domestic services in March, with new brand Little Red operating a series of shuttle services between Heathrow and Manchester, Edinburgh and Aberdeen.
Kreeger said: “This marks a step change in Virgin Atlantic’s business model.
“Already, 27% of Little Red passengers are connecting onwards with Virgin Atlantic at Heathrow. This will be a significant revenue generator for the business.”
He added: “The alignment with Delta will give Virgin Atlantic passengers greater connectivity throughout North America meaning a more attractive offering and will greatly enhance Virgin’s sales base and revenue opportunities across the US.”
Kreeger insisted: “The enduring strength of the Virgin Atlantic brand has not wavered.”
He reported a 6% year-on-year increase in sales at Virgin Holidays and said: “Virgin Holidays continues to be the UK’s preferred choice in long-haul trips worldwide.”
Sourced by Travel Weekly
By Alan Dron
Air Malta expects to sharply reduce its losses this year as it enacts its turnaround plan, according to CEO Peter Davies.
Speaking on the sidelines of the European Regions Airline Association (ERA) annual conference in Edinburgh, Davies said he anticipates Air Malta’s loss for 2012 would be around €15 million ($19.6 million), compared to the figure of around €55 million he inherited two years ago.
He said the carrier’s major restructuring plan is on track, largely due to the €130 million in state aid approved by the European Commission (EC) in June 2012.
He said that Air Malta was in a better position than Cyprus Airways, which is reportedly facing bankruptcy if it does not receive financial aid. That, he believed, was a reflection of the parlous state of the Cypriot economy. By contrast, “The economy in Malta is very strong. It’s been managed exceptionally well and unemployment is very low,” he said.
Sourced by ATW
An internal memo from new chief executive Craig Kreeger seen by the newspaper said the airline’s financial performance is “well behind where we anticipated” following a £80.2 million deficit last year.
The airline confirmed the detail of the memo in which Kreeger imposes an immediate pay freeze and initiated a broad-based cost cutting plan. Virgin Atlantic said the UK airline industry had faced “continued challenges over the past year”.
Plans to increase long-haul revenues by £50 million and make savings of £40 million would not be enough to get the airline back into profitability, said Kreeger.
“The 2012-13 financial airline performance will be a significant loss. Two years of significant cash losses have depleted our resources and decreased our ability to invest,” he said.
This meant the carrier would have to make “some tough calls”.
“One of those decisions is to recognise and communicate the reality that we cannot afford any pay increases this year. It is not ideal that this is the first big decision I have to take,” he added.
Virgin Atlantic faces higher fuel costs and greater competition on transatlantic routes from the British Airways/American Airlines joint business.
The airline has responded by forging its own partnership on the North Atlantic with Delta Air Lines becoming a 49% shareholder and creating its own UK domestic arm to feed traffic onto long-haul services from Heathrow. More fuel efficient aircraft are also being introduced to the fleet.
“These improvements will result in considerable financial savings,” the carrier said. “The airline has also made the decision to suspend salary increases for this financial year.”
Sourced from Travel Weekly