Market Report: Flybe flounders as Paris attacks put customers off flightsComments Off on Market Report: Flybe flounders as Paris attacks put customers off flights
Shares in Flybe were knocked off course on Thursday by third-quarter results which showed the Paris attacks deterred people from flying.
The regional airline said the load factor — how full its planes are — fell to 68.9% in last year’s final quarter from 74.3% the year before, which meant it made £46.61 in revenue per seat compared with £49.65 in 2014.
Shares, which are up 50% since last June, went into a tailspin, down 1.75p to 82.75p even as it confirmed it accelerated its cost-cutting in the quarter in an effort to return to profit.
Chief executive Saad Hammad, who is leading Flybe’s turnaround, said it chose to “protect yields rather than to chase unprofitable marginal revenue”.
House broker Liberum said: “In our view, the short-term obstacles do not hinder Flybe’s ability to return to profitability, underpinned by its strong position in the UK regional air travel market.”
On Tuesday, easyJet (6p lower at 1567p) revealed revenues per seat were down 3.7%, also blaming the recent terror attacks.
The FTSE 100 treaded water today, up 1.12 points at 5991.49 after the US Federal Reserve decided to keep interest rates unchanged as expected, but indicated it was keeping a close eye on the state of the global economy.
With the oil and metals prices stable for a change, miners and energy firms topped the blue-chip chart.
The dead cat bounce continued for beleaguered Anglo American, which jumped 22.1p or 9% to 275.85p as it revealed it kept up the pace of mining last year despite heavy falls for the prices of the commodities it digs for.
Investors dumped shares in equipment rental firm Ashtead, which fell 60.5p or 6% to 905.6p on the back of disappointing results across the Atlantic for rival United Rentals, caused by the oil and gas downturn.
Ashtead’s house broker Jefferies rushed to soothe investors’ concerns, insisting that it is less reliant on revenues from the American energy sector than United.
Bruised by Apple’s weaker outlook yesterday, shares in chip designer ARM Holdings fell another 9.5p to 986p after US competitor Qualcomm’s profits crashed 24% in the first quarter, sparking concerns that slowing sales of the iPhone will hit other suppliers including ARM.
Elsewhere, the rally continued for blur Group, the former AIM tech star which in 2015 was forced to restate revenues for previous years by the accounting watchdog. Its shares rose 2.6p to 16.6p as it claimed losses for last year would be smaller than expected.