Flybe shares nosedive on profit warning
Shares in the UK’s biggest domestic airline have nosedived 25 percent after it announced that full-year profits will come in short of expectations.
Flybe, which flies from airports including Cardiff, Edinburgh and Birmingham, blamed the failure to hit its forecast on high oil prices and a recent slowdown in consumer spending on air travel.
Profits for the year ending 31 March are expected to be £22m, some £2m short of expectations. Shares fell from 230p to 172p. The shares now stand 42 percent off their 295p launch price when they were floated last December.
Jim French, Flybe’s chairman and chief executive, told The Telegraph: “We haven’t had any angry shareholders. Obviously, there have been a lot of questions but no one has shouted at us.”
Markets had factored in higher fuel costs but reacted strongly to the lower passenger volumes at the end of February and March.
Flybe’s fourth-quarter trading update included IPO costs of £1.7m. Most of the fees went to the banks that floated the business - Bank of America Merrill Lynch, Investec and Execution Noble.