Flybe turnaround shows early sucess

Exeter airline Flybe will cut around 50 fewer jobs than initially expected as their business turnaround shows early signs of success.

The airline had initially proposed cutting 500 jobs as part of its turnaround plan revealed last November, but now says current cuts will be closer to 450.

Much of these savings have been made by cutting several unprofitable routes to remove the operating costs of the routes such as fuel and staff wages. 

However this has incurred one off grounding costs of £14 million this year with a further one off costs of £26 milllion next year. Flybe has said they are working to reduce this figure.
In a report released today the company writes:  “Flybe is on track to achieve the further cost benefits... These include around 450 job losses, slightly down from the estimated 500 announced in November.

“Of these, about half are expected to be voluntary redundancies, others will be leavers and there are anticipated to be around 40-60 compulsory redundancies.”
The airline worked closely with trade unions launching consultation which reduced compulsory redundancy to 10% of the initial estimates; however final figures are yet to be confirmed.

The company writes: “Flybe is extremely grateful for the positive and constructive way in which the employees, Trades Unions and Employee Representatives have approached the consultation process regarding redundancies as well as the efforts that have gone into mitigating the numbers of job losses.”

General Secretary of Pilots’ union BALPA, Jim McAuslan, said in November:  “Flybe needs to get back on the right track, but it is extremely disappointing that redundancies will be needed to do that. 

“We will be working with the company day-in, day-out to keep compulsory redundancies to an absolute minimum and to help pilots who have loyally served the company and its passengers find new jobs.
Flybe is in the process of closing six bases and cutting somewhere in the region of 180 pilots across its service. This figure may be less following today’s announcement.

Encouragingly the turnaround plan seems to be gathering pace and the group is expected to reach their savings target later this year.

Saad Hammad, Chief Executive Officer, commented: “We are on track to deliver £40 million of annual cost savings from Phases 1 and 2 of the Turnaround Plan by 31 March 2014, and significant rapid progress has been made already on the additional Immediate Actions announced in November last year.

“The transformation of our cost base is being successfully delivered thanks to the hard work and determination of our people and with the support of all stakeholders.