Flybe CEO on joint ventures: No thanks

Flybe, Europe’s biggest regional airline, wants to expand code-sharing agreements with long-haul carriers to boost passenger numbers after barely breaking even in its last fiscal year. Flybe stock fell to an 11-month low after CEO Saad Hammad said the UK carrier earned a “wee” pretax profit in the 12 months through March. He said the figure in line with estimates from analysts, who were predicting earnings of GBP3.3m, according to a Bloomberg survey. The company is scheduled to release detailed financial figures in June. The CEO is trying to restore earnings after the breakup of an unprofitable joint venture with Finnair contributed to a GBP35.6m-pound pretax loss in the year through March 2015. Hammad said Thursday that a decline in the proportion of seats filled in Q4 of fiscal 2016 stemmed from recent terrorist attacks in Paris and Brussels that deterred travellers. “The operating environment is still very difficult and uncertain” following the attacks, and Flybe faces other challenges as it’s not fully hedged against shifts in the pound-dollar exchange rate or oil prices, said Wyn Ellis, an analyst at Numis Securities. The company wants to bring the number of code-sharing airline partners into double digits from nine now after existing deals generated about extra 500,000 passengers in the fiscal year, Hammad said. Flybe will limit future cooperation to code-sharing, which enables partners to book seats on each other’s flights and split revenue, because full-fledged joint ventures are too complex, Hammad said.<br/>