FlyBe - 6

[Skipness One Echo]

loading it with unnecessary overhead

That's the trick. Using Ockham's razor to keep the brand in place, the terms and conditons seperate from LHR using outsourced handling as per industry standard now. Their track record in ruining Brymon, British Regional and CityFlyer Express suggests otherwise alas.

[iwhak]

However I dont think you can question one of the only airlines still making money in the current climate?

Wouldn't be so certain!

[speedrestriction]

in the future when the company is established

Um...Spacegrand, Jersey European, British European, flybe etc has been around for thirty years. What counts as established these days?!?

iwhak, just to clarify, are you calling into question flybe's profitability or the profitability of other airlines?

sr

[iwhak]

The post from Maverick8701 states that Flybe are making money in the current climate. Yes, to be clear I am questioning that they are!

[Snigs]

Oh yes they are, for this year.

And the projected loss for next year is only £1M..... not bad compared to losses of £80M-ish for some other airlines!!!

[iwhak]

I do not wish to denegrate BE in any way, but why would they predict a loss for next year (which allegedly will see the begining of economic recovery) if they are generating profits this year which is one of the worst years the industry has seen!

[Haven't a clue]

Bear with me...

BE's accounts spell out their fuel hedging policy, which is (per 2008 accounts):

The objective of our fuel hedge policy is to smooth the cost of fuel over time and to de-risk the cost escalation as far as possible, thereby enabling the Commercial team to price our product before the selling season commences. The policy is to buy 5% monthly tranches over a 12 month period, starting 2 years ahead of flying, thus ensuring we are 60% hedged 12 months in advance

They go on to say:

The company has not adopted the fair value accounting rules of FRS25 and FRS26 and recognises gains and losses of fuel derivative contracts as they mature.

Finally Note 35 to the accounts says (albeit shortened by me):

The group has derivative financial instruments that it has not recognised at fair value as follows:
• Foreign currency derivatives with a mark-to-market net asset totalling £1,830,000 (2007: £1,987,000 net liability).
• Aircraft fuel derivatives mark-to-market with a net asset totalling £3,158,000 (2007: £1,139,000 net liability).
The foreign currency derivative instruments represent 137 open contracts comprising swaps, forwards and options with maturity dates ranging from April 2008 to August 2010 which are to purchase either US dollars or
euros to meet business requirements.
The fuel derivative instruments represent 42 open contracts comprising swaps, collars and options with maturity dates ranging from April 2008 to October 2009 which are to purchase aviation fuel.

The upshot of this (and feel free to correct me) is that fuel costs are 60% hedged 18 months forward, and any gain or loss on the hedge is ignored in the annual accounts. So earlier hedges will have held their fuel costs down through their year to 31 March 2009 and they should thus enjoy a healthy profit. However hedges made in summer/autumn 2008 when the fuel price rose significantly will hit the accounts in the year to 31 March 2010 so unless they have jacked up their fares significantly (and my experience booking with them suggests they haven't) there will be a negative impact on profit.

Although they operate a fuel efficient fleet, and thus are less exposed to fuel costs than others, they will also be suffering from the economic downturn as well.

Hence I guess the forecast £1m loss referred to by Snigs.

[cheesycol]

I am not sure about the redundancies, I would expect BE to offer BA staff the option of a transfer and retraining onto the Q400/E195 fleet as they did with BA connect. I cannot see how BE have enough staff as it is to fulfill the requirements for all the domestic ops ex-LGW so I expect BA will put this option forward.

That's cheered me up no end!! I would suggest that Connect salaries were, at best 2/3rds of an equivalent mainline paypoint, plus a MASSIVE difference in allowances. There would be no way that Jim would agree to pay protect that!! It wouldn't even be a passing thought!! Plus, there would be mutiny and murder if a BA mainline pilot were to be pressganged onto a Flybe Scheduling Agreement. Awesome!!

BA only have 3 domestic routes ex-LGW; MAN 5x daily, EDI 4x daily, GLA 4x daily. If I were a betting man, BE would take MAN down to x4 and I reckon it would require 1 & 1/2 airframes per route per day. Call that 5 aircraft, 6 if they had to, and it would probably be a mix of dash & 195s. Not such a big ask of Flybe resources at the moment.

The differences between Flybe/Connect and the above are like night and day, least of all that Connect ceased to exist! I have no doubt that BA could redeploy that number of displaced crew within their business. Great speculation though.

[Maverick8701]

good post cheesycol.

I am led to believe that Flybe would be able to easily crew the EDI/GLA and MAN with their own crew and those currently swimming in the pool. A second point I am reliably informed that Flybe very nearly started the LGW-MAN route effective of the LGW base opening to go with the DUS it was apparently on some plans. However due to the economic climate and BMI coming off the LBA LHR it was shelved and the LBA put in its place. However im not sure what would have happened with the BA route if it went ahead? Anybody have any idea whether they would have come off it or gone into competition? Seems a bit silly to compete on routes given the interests.

Same source mentioned EDI/GLA are ment to be more tricky than MAN due to union issues this true?

[cheesycol]

The possibility of an EDI/GLA dual base has caused some consternation amongst the ranks, especially those who are familiar with the drive between the two airports. BALPA would require a number of specific caveats before approval as a dual basing.

Regarding the BA CC, it would remove the Scope clause from the issue, as BA would be effectively giving away the route to a non-BA airline. I can see that causing some issues if utilised as a management tactic, especially if BA increased their share in Flybe and profited from the arrangement.

Still chuckling.......!

[OltonPete]

G-ecob Q400

As mentioned in an earlier post it seems that G-ECOB will be on it's
way back from Norway soon.

Selective quote from the CAA site G-INFO: -

""Open Aircraft Registration Cases
Case Name: Restoration to the UK Register Open Date: 27/04/2009
Review Date: 22/05/2009

Open Applications and Approvals Cases
Application Type: C of A Issue Received Date: 28/04/2009
Expected Date of Processing: 19/05/2009/"

End of quote

BHX's second operating 195 should finish today when the early
morning Glasgow and afternoon Dusseldorf change to the Q400
per the timetable. Whether this actually happens remains to be
seen but not long to find out.

However last week the "spare" 195 was operating virtually a full
Q400 schedule.

Still no sign of G-ECOT on G-INFO, are the rumours true as indicated
in earlier posts that this aircraft is not coming or is it just delayed?

Pete

[MUFC_fan]

Anybody know what the figures are like on the BLK-IOM-BHD routes?

[Maverick8701]

Not sure if Flybe would have access to those figures as a loganair route I guess untill the CAA release them.

With ECOB coming back from Wideroe (SAS) does that mean the others will also return?

As for the Q400's maybe they have delayed them untill LGW opens at the end of June or dare I say it.......financing problems? Not saying they are but is a possible explanation for delays with the banks like they are!

[FS01]

MUFC fan i could give those figures, but can't.... all I can say is that BE and Logan have scheduled twice daily on both routes through the winter. so the loads are not bad!

[ALLMCC]

If the ones loaned to Wideroe are returning then presumably the ex-Wideroe examples currently flying for Flybe will be returning to Wideroe. If that is the case, then Flybe will still have the same number of Q400s assuming there are no further new deliveries in the pipeline.

[MUFC_fan]

That's good.

I have seen that Manx2's loads haven't suffered so obviously there will be a steep rise in passengers on the route over the next 12 months.

I and many others thought two carriers on one route wouldn't work, it probably still won't, but I hope it does!

[FS01]

MUFC fan a lot of people have been hoping the same but it is too early to tell. End of the season should give some answers.....

It sounds like BE will also be basing a 4th Q400 at IOM in the not too distant future (2010)

[Tonyq]

Q400's

Both G-ECOT and G-FLBA have been reported test flying out of Toronto over the last week or two as C-FVUV and C-FVVB, in FlyBe colours, so if they are going elsewhere, then it must be a last minute decision.

But bringing G-ECOB back, (and presumably C/E/F eventually) throws more permutations into the mix.

I guess we can only wait and see what happens before the LGW based routes start.

[Deano777]

I have ECOT on my roster for next month so it must be imminent.

[TechProblem]

I know Manchester will be getting 2 more based DH4's as the last 145's (JA/JC) will be leaving the fleet at the end of this month.

I heard OT will be one of them.

TP