Flybe (HOLD) – Airline has to prove that it can generate sustainable profits

Flybe (HOLD) – Show me
FLYB LN (45p, TP 45p), Market Cap: £98m
Huge progress has been made with restructuring but FLYB still has to prove that it can generate sustainable profits with its regional airline business model. The company is now on the right track, focusing on tighter management of capacity and profitable routes. The new CEO should bring further impetus. Moreover, with legacy fleet deals coming to an end, FLYB can operate its aircraft more flexibly. It needs to do this to lift load factors and yields. Lower fuel costs are also now locked-in. We think that the next twelve months are crucial. FLYB has the tailwind it needs to improve performance. For now, we maintain HOLD.