Higher costs prompt Flybe profit warning in tough year for airlines

Flybe warned Wednesday that H1 profit would be lower than expected, sending shares tumbling as higher maintenance costs compounded a tough airline market. Flybe said it would review its maintenance strategy with the aim of improving aircraft performance and costs. It would attempt to enhance the reliability of the Bombardier Q400 turboprop in particular. Shares fell as much as 18% after a warning which comes against a backdrop of intense competition in the sector that has kept prices low and put several larger companies out of business. Flybe said it now expected an H1 adjusted profit before tax in the range of GBP5-10m, down from 15.9m in H1 2016-17. “While half-year profits are lower than expected, I am confident that we are still on a clear sustainable path to profitability in line with our stated plan,” CEO Christine Ourmieres-Widener said. “The increased maintenance costs are disappointing, but we are already addressing these in the second half and remain focused on improving our cost base and reliability performance.”<br/>