Airline Flybe to limit capacity to tackle challenging markets

Flybe Group set out plans to keep a lid on capacity as it contends with increasing competition and slowing growth in consumer demand. The company said on Thursday that moves to slow its expansion had already provided some benefits and that it would cut capacity in the second half to leave it broadly flat for the year to March 2018. Performance in the current financial year to June 5 had shown a 4.6 increase in passenger revenue per seat, Flybe said, adding that it had sold 45% of its capacity versus 44% at the same point last year. "Forward booking trends point to unit revenue improvements that we view as encouraging," Liberum wrote in a client note, adding that headwinds for the company were starting to "moderate". It has a "Buy" recommendation on the stock. The company reported an adjusted pretax loss of GBP6.7m for the year to March 31, against a GBP5.5m profit the previous year. Flybe said that IT costs were lower than expected at GBP4.8m, having warned in March that it expected a charge of between GBP5 and 10m related to a systems upgrade. It has been contending with industry-wide challenges where larger European airlines have driven down fares by adding more seats to boost their market share in a period of lower oil prices.<br/>