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Primary Recommendation

Flybe - Ex Easyjet chief working his magic at domestic carrier

June 2014

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • FLYB
  • Price:
  • 142.25p
We originally profiled Flybe, the UK's largest domestic carrier, in the July 2012 issue at 68p. At the time, although we stopped just short of Buy rating the shares, our expectation was that declining jet fuel prices would trigger a profit increase. But the problems at Flybe were clearly bigger than just jet prices, with its bloated cost base making it unsuitable for running planes on thin routes and it came close to bankrupting the group. Since its float in December 2010, Flybe has issued five profit warnings. In 2013, it posted annual pretax losses of £40.7m, when debts reached  £66.3m. It has taken the appointment of Saad Hammad, former chief commercial officer of EasyJet, in August 2013 and the successful completion of a £150m ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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