LONDON: Flybe Group shares slumped more than 20 per cent after the British budget airline said it would break even before tax in its financial year ending in March 2015 after a fall in third quarter passenger revenue.
But Flybe has since been on rocky ground, swinging back to a loss in the first half of its current fiscal year due to one off costs and a charge related to its exit from its Finland joint venture.
Flybe said we believe that this competitive pressure will extend the period of time that these routes take to reach maturity and deliver the full contribution we expect.
The full year forecast followed a 3.8 per cent drop in passenger revenue in the final three months of 2014 to 126.8 million pounds on the back of competition on some New London City airport routes.
The airline said excluding costs relating to grounded Embraer E195 aircrafts and the impact of some loan revaluations, it now expected to break even before tax this fiscal year.
Gerald Khoo, Liberum analyst said this forecast implied a 9 million pound cut to profit estimates. He cut his target price on the stock to 140 pence from 180 pence, but kept his buy rating.
