Author Topic: FLYBE.L - Flybe  (Read 9716 times)

ebdem

  • Jr. Member
  • **
  • Posts: 96
    • valueDACH Value Investing Community
Re: FLYBE.L - Flybe
« Reply #20 on: June 25, 2017, 02:56:29 PM »
Sorry. Needed some time to reply.

To add information to the balance sheet talk: Fly.Be owns 27 aircrafts. 20 are Q400 (https://en.wikipedia.org/wiki/Bombardier_Dash_8#Series_400 and 7 are E175 (https://en.wikipedia.org/wiki/Embraer_E-Jets).

I am holding 3-4%, but it also around 25% under water. Greenwood is at 4,5% (https://www.gwinvestors.com/wp-content/uploads/2017.04.06-Q1-2017-Letter-Conscious-Capitalists-w-Appendix.pdf).

I think load factor will increase, while they are reducing the flight network. Load factor is at the moment also lowered by the (i think) Cardiff contract and on the graphic I posted from the IR presentation, we can see the optimization potential for the network. There seem to be many routes with low load factors. I have to look deeper into the numbers of the overhead to get your argument...


LightWhale

  • Jr. Member
  • **
  • Posts: 85
Re: FLYBE.L - Flybe
« Reply #21 on: June 25, 2017, 10:59:44 PM »
Thanks for the reply.

I see your point about LF increase. The model I mentioned includes a load factor of 75%, which is a 5-6% increase from FY2016-17, and a target they have only achieved once in the last decade. Sure, they might do even better, but it would not be conservative to assume that. What they are returning this year is 6 Q400, and not any of the E-195 which hurt their LF so much.


on the graphic I posted from the IR presentation, we can see the optimization potential for the network. There seem to be many routes with low load factors. I have to look deeper into the numbers of the overhead to get your argument...

Yes, a lot of room for improvement. However, the slide shows that about 60% of routes are highly profitable, 30% are low profitability/ break even, and the rest 10% lose very little money. Had we looked at that graph without knowing the financial results, we would have concluded that Flybe was very profitable. But it doesn't add up, so considering that actual cashflow is negative, either the slide is wishful thinking, or it highlights the tacit overhead.

The stock can quickly double, but the last years have demonstrated how susceptible airlines are to exogenous shocks, and the range of possible outcomes seems wide. So i'm thinking to keep the position small. Do you expect them to be CF positive this year, or only next year? do you mind posting your numbers?
« Last Edit: June 25, 2017, 11:29:13 PM by LightWhale »

ebdem

  • Jr. Member
  • **
  • Posts: 96
    • valueDACH Value Investing Community
Re: FLYBE.L - Flybe
« Reply #22 on: June 27, 2017, 01:48:09 AM »
As I understand FlyBe, the historical comparison is a bit hard, cause we are having a company with many different faces or better phases, that are reflected in the numbers. Yes, the numbers look bloody. But what do they say for the future? Some of the problems might still exist (maybe in IT), but in my eyes it's hard to use other numbers for the future.

On the handback of planes: They hand the planes back, if lease expires. So we have to wait a bit, till E-195 will be handed back.

Yes. Overhead is a point. It was 4,3 mio pound in 2016/17. Yes, you are right, that the chart might be missleading. But it shows one problem, that can be tackled in the company. If they can manage the network activly and don't need to play firefighters to place leased planes unprofitable, they have the chance to get a better network and have the chance to lower overhead costs. You need less firefighters in the future, if there is no fire.

Yes. There are still risks. But how big is the downside and how big is the upside? In the company I see more upside, cause they have in their hands to increase profitability. Brexit might be an issue, but with May's new government, I don't see a hard kind of Brexit and more willness to find compromises. We will see.

ebdem

  • Jr. Member
  • **
  • Posts: 96
    • valueDACH Value Investing Community
Re: FLYBE.L - Flybe
« Reply #23 on: July 26, 2017, 09:46:37 AM »


KJP

  • Hero Member
  • *****
  • Posts: 698
Re: FLYBE.L - Flybe
« Reply #25 on: January 31, 2018, 07:30:32 AM »
The various presentations on Flybe's website and its annual reports provide timelines for the upcoming surrender at end of lease for the E195s and some of the Q400s.  This past year should turn out to be the turning point in terms of fleet size.  Of course, Brexit is also looming, and I don't think anyone can really predict what that's going to do to Flybe, either in terms of demand on its wholly domestic routes or its ability to continue flying its UK-Europe routes.

Finely getting some control over fleet size is having the desired effect -- Flybe's planes were alot fuller last quarter than they were a year ago without any decline in price per ticket:  http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/FLYB/13515378.html

Without Brexit, the situation should continue to improve as more planes come off lease and are handed back.  But Brexit without a deal that allows Flybe to keep flying to the continent may kill the company.   


KJP

  • Hero Member
  • *****
  • Posts: 698
Re: FLYBE.L - Flybe
« Reply #26 on: October 17, 2018, 06:43:54 AM »
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/FLYB/13831394.html

Continuation of both the good (fewer empty seats as they chop the fleet down to size), the bad (rising costs, including fuel and USD denominated debt against sterling revenue) and the potentially ugly (no Brexit deal yet).