Flybe Group PLC Annual Report 2013 14 PDF

Flybe Group plc Annual Report 2014
transforming
flybe
Flybe Group plc
Annual Report 2014
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456M
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Flybe at a glance
Key financial highlights
2014
m
868.4
(247.9)
620.5
Total revenue under management2

Less: joint venture revenue
Group revenue
Adjusted profit/(loss) before tax, net restructuring
and surplus capacity costs3
Adjusted profit/(loss) before tax and
net restructuring4
Profit/(loss) before tax
Profit/(loss) after tax
2013
(restated)
m
781.5
(167.2)
614.3
1.7
(23.6)
8.3
8.1
8.0
(33.1)
(41.1)
(42.2)
Includes our franchise partner, Loganair.

Includes our joint venture, Flybe Finland.
3
Adjusted profit/(loss) before tax, net restructuring and surplus capacity costs defined as
profit/(loss) before tax, net restructuring and surplus capacity costs of 1.9m (2012/13: 12.8m)
and revaluation gains on USD aircraft loans of 8.3m (2012/13: loss of 4.7m). Surplus capacity
costs represent the costs incurred in the year relating to capacity that is considered by
management to be surplus as a result of restructuring decisions taken in 2012/13.
See pages 23 and 24 of the Financial Review for further detail.
4
Adjusted profit/(loss) before tax and restructuring defined as profit/(loss) before tax and net
restructuring costs of 0.2m (2012/13: 8.0m).
2
Overview
Flybe at a glance
Introducing our new CEO
Strategic report
Chairmans statement
Business model
Chief Executive
Officers statement
Business review
Strategy and KPIs
The Purple Way
Financial review
Risks and uncertainties
Corporate responsibility
Governance
Chairmans statement
on corporate governance
Board of Directors
Corporate governance
Audit Committee report
Directors report
Directors remuneration
Statement of
Directors responsibilities
IFC
2
8
12
14
16
19
20
21
34
38
45
46
49
58
63
66
84
Financial and other information

Independent auditors report
85
Consolidated income statement 90
Consolidated statement
of comprehensive income
91
Consolidated statement
of changes in equity
91
Consolidated balance sheet
92
Consolidated cash
flow statement
93
Notes to the consolidated
financial statements
94
Company balance sheet
133
Company statement
of changes in equity
134
Company cash flow statement 134
Notes to the Company
financial statements
135
Five-year summary
138
Glossary139
Acknowledgments
Flybe would like to thank all those who participated in producing this report,
particularly the members of staff for their contributions.
This report is available on our website: www.flybe.com/corporate/investors/
The Directors present the Annual

Report and Accounts for the year
ended 31 March 2014. References
to Flybe, the Group, the Company,
we or our are to Flybe Group plc
(registered number 1373432) and
its subsidiary companies, where
appropriate. The Strategic Report
contains statements that are forward
looking. These statements are made
by the Directors in good faith based
on the information available to them
up to the time of approval of this
report. Such statements should be
treated with caution due to the
inherent uncertainties and risk
associated with forward
looking information.
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Overview
Strategic report
Governance
Delivering on
Flybes turnaround
Delivering connectivity
for the UK regions
1 1.1% growth in Revenue under management

to 868.4m (2012/13: 781.5m)
.9% increase in passenger numbers

6
in UK scheduled airline at 7.7 million
(2012/13: 7.2 million), despite 1.4% reduction
in seat capacity
620.5m of Group revenue (excluding joint
venture) up by 1.0% from 2012/13s 614.3m
.4 ppts improvement in load factors

5
to 69.5% (2012/13: 64.1%)
ecord passenger numbers and load factors

R
in UK scheduled airline
.3% decrease in Group operating costs before
3
restructuring at 619.5m (2012/13: 640.9m)
8.1m of profit before tax of compared to loss
of 41.1m improved performance in every

part of Flybes business
win-engine growth strategy announced
T
branded and white label
150.1m of net cash raised reflecting investor
confidence in Flybes future
Financial and
other information
1 .8% improvement in Flybe UKs passenger

revenue per seat at 49.70 compared to prior
years 48.84; Flybe UKs cost per seat (on a
constant currency basis) before restructuring
and surplus capacity was 1.6% below prior year
5.1% sector share up from 52.4% last year
5
making Flybe the leading airline brand in the
UK regional market. In the UK domestic sector,
Flybes share was 28.3% (2012/13: 28.1%)
perating from 7 UK bases and serving
O
64airports in total throughout the UK
and Europe1
Major expansion announced at London City
Delivering connectivity for

Europes mainstream airlines
247.9m of revenue in first full year of
expanded Finnair joint venture operations

upfrom 167.2m in 2012/13
ervice standards and punctuality
S
on and above target
umber of ongoing discussions for new
N
white label opportunities
Flybe Group plc Annual Report and Accounts 2013/14

Transforming Flybe
he last few years have been difficult

T
for Flybe. What made you want to take
up the job?
There were three reasons.
First, I spotted in Flybe significant potential based

on a clear and compelling purpose which the business
had not really capitalised on. By providing regional
customers with time-saving access to the world, Flybe
had the potential to play a unique and powerful role in
connecting regional communities and linking regional
economies not just in the UK but across Europe, both
in a Flybe-branded capacity and by flying regional
routes on behalf of national flag carriers.
2013/14 has been a year

of transformation for Flybe with
a significant restructuring of the
business, extensive organisational
muscle-building, new process
implementation, in-year delivery
against key revenue and cost
objectives, a major equity fund
raising and the setting out of a new,
clear strategic vision. Its new CEO,
Saad Hammad, explains.
I could see that the alternative to a 90-minute flight

with Flybe is usually a long and painful car, ferry and/or
rail journey that is at least three hours long. So Flybe
plays aunique role in fulfilling important social and
economic needs. If Flybe didnt exist, it would be
necessary to invent it. Our smaller aircraft give us a
unique ability to serve lower volume regional routes
which the larger airlines cannot operate profitably with
their bigger aircraft with more seats to fill. Our aircraft
types also enable us to operate out of smaller, local
airports with shorter runways. Through hub airports,
we also connect local airports to the world.
The second thing that struck me is that Flybe is full of
good people. Professional, diligent people, passionate
and committed to what we do. People who, above all
else, are decent and authentic, with big hearts.
The combination of a great purpose and great people
was hugely attractive.
The challenge, of course, was that Flybe could only
thrive if structured in the right way. We needed a
competitive and sustainable cost base, an upgraded
commercial capability and a rigorous, fact-based
management culture. The business was in need of a
significant transformation. Ihave extensive experience
not only of the airline sector but also of business
turnarounds and transformation, so Iknew what
needed to be done. This is the third reason.
Overview
Strategic report
Governance
Financial and
other information
lybe has emerged from its

F
recent challenges a stronger
and better organised company,
well positioned for the future.
Q
What struck you on joining?
y first impressions included

M
many positives:
>>Flybe
has an established brand with strong UK

domestic and UK regional sector shares.
>>There
was great momentum behind Phases 1 and 2

ofthe restructuring programme that had already
started, although I could see that further Immediate
Actions were required.
>>Finnairs
CEO gave me some very positive feedback

about Flybe Finlands service and cost performance
in our contract flying operation with 22 aircraft
operating on Finnairs behalf.
>>Flybes
employees told me loudly and clearly that

there was a real mandate for, and expectation of,
change to how the business operates.
>>During
my personal discussions and interactions

with staff, both at headquarters in Exeter and around
our bases, I was exceptionally impressed by their
professionalism, commitment and passion.
I wanted to build on these strengths. Hence the

strategy I announced in November 2013 used these
asthe cornerstones for the development of a reshaped
Flybe. It was clear that there was much to do, but the
willingness among everyone in the business to see
through real change was fundamental. The way our
employees have reacted subsequently to the size and
pace of change, has been amazing.
Flybe has a magic ingredient and that is its people.
Iam immensely proud to be serving them as their CEO.
You mentioned the challenges

what were the key ones you faced
on joining?
The main challenges were to ensure the

survival of the business and to establish a
secure platform for profitable future growth.
Our cash position needed strengthening, our costs
were too high and the cost reduction measures already
underway were a start but just did not go far enough.
Our commercial capability was also weak and too
many routes were unprofitable. Our network and
organisation were complex and inefficient, and we
had surplus, underutilised aircraft with aircraft types
ill-matched to the needs of our route network. Finally,
confidence was waning amongst all stakeholders.
To address these issues, I asked everyone in Flybe

to concentrate on what I called the 5 Cs:
1. Cash improving our cash position to create
maximum financial headroom.
2. Cost moving to a world-class cost base through
additional measures to compete profitably and offer
attractive fares to customers; and establishing an
efficient organisational structure.
3. Configuration ensuring we have the right route
network, number of bases and aircraft, and aircraft
types (right aircraft on the right routes); and
improving aircraft and crew utilisation.
4. Commercialisation strengthening our
commercial capability to focus on customers
and drive revenue growth.
5. Confidence building the confidence of our
shareholders, our customers, our partners and our
employees through active engagement and urgent
delivery on the priorities of the business.
I am delighted that we have been able to meet the
challenges faced by the business head on through
the 5 Cs programme. Flybe returned to profitability
in 2013/14 and generated positive operating cash.
Our shareholders supported a significant capital raise
in March 2014.

Transforming Flybe
Continued
While we are not yet operating at full potential and are

still moving towards target levels of profitability, we
have moved back into profit, reconfigured the business
to a more viable network, started to reduce unit costs
to a more sustainable level and have started to
generate commercial momentum, with unit
revenue growth in every month since August.
Flybes load factors are now at record levels.
We are of course saddened that we have had to lose
so many diligent, committed colleagues via TUPE
transfers or redundancy. I am very grateful for the
positive and constructive way in which our employees,
trades unions and employee representatives
approached the consultation process regarding
redundancies as well as the efforts that went into
mitigating the numbers of job losses. The headcount
reductions are now largely delivered, although there
are a few people still scheduled to leave Flybe at the
end of the summer.
In total during the year, we generated 47m of cost
savings, through headcount reductions, outsourcing
and procurement gains. We disbanded the Companys
divisional structure, streamlined the senior management
team and moved to a simplified, integrated organisation
which we have called One Flybe.
In terms of configuration, we refocused our UK
network on the seven larger bases and closed six
smaller bases in the Isle of Man, Newcastle, Aberdeen,
Inverness, Jersey and Guernsey. Flybe is of course
continuing to operate services to and from all of these
airports. We also successfully rationalised our route
network for the Summer 2014 season (beginning
April2014), impacting 55 out of last years 140 summer
routes, including the discontinuation of 30 unprofitable
routes. Surplus aircraft capacity is being addressed
bygrounding 10 aircraft at the end of March 2014
and afurther four by the end of the Summer 2014
season. Work is continuing to reduce the cost
of this aircraft grounding.
A significant part of our improved commercialisation

programme involved the filling of key management
roles through a balance of external recruitment and
internal appointments. Revenue, pricing and route
management improvements were implemented and
a number of marketing enhancements were rolled
out, all with positive revenue per seat, load factor and
contribution impact. Partner and supplier negotiations,
for example, with airports and aircraft manufacturers,
also delivered significant benefits. A structured route
profitability and selection methodology was developed
and implemented. Over 100 potential new routes have
been assessed using this approach and nine new routes
were selected for Summer 2014, which are already
trading ahead of expectations.
Separately, we made progress on improving the
profitability of our Finland joint venture with Finnair.
The Flybe Finland JV continues to be profitable in its
white label flying operations. A programme to reduce
losses in the legacy scheduled risk flying business is
being implemented with effect from April 2014, with
two of the six loss-making lines of scheduled risk flying
being removed.
The changes we made have enabled us to regain
the confidence of all stakeholders. We approached
the capital markets in early 2014 and were able to
raise 150.1m of net proceeds on 12 March 2014 in
a Firm Placing and Placing and Open Offer. The fact
that this was over-subscribed, and at a price that was
only a 7.2% discount to the share price immediately
prior to the announcement, reflects the growing
support that the investment community has for Flybe.
We now have a balance sheet which allows us to
weather significant shocks that can impact the whole
aviation industry and we have the financial firepower
to fund additional productivity enhancements and
profitable future growth.
We also now have a balanced shareholder base
supported by some well-known and highly respected
institutions, although this has entailed the exit of
Rosedale from the shareholder register. Rosedale
and the Jack Walker family have been unswerving
supporters of Flybe over many years and I would
like to thank them for that.
Overview
Strategic report
Governance
Financial and
other information
013/14 has seen Flybe return

2
to profitability and make
a significant step towards
our goal of being Europes
best local airline.
Q
You have talked about the internal

challenges but what about the wider
back drop for aviation?
The aviation industry is a vital part of the

wider economic landscape. Without it, both
domestic and international trade would be
much more difficult and the global economic picture
would be a radically different one.
On a global level, air travel demand looks set to

continue growing in line with the global economic
recovery. On the supply-side, aviation remains highly
competitive, with the rise of the Middle Eastern
network carriers providing a real challenge to the large
established flag carriers in Europe. This threat to their
profitability may well, over the course of time, lead
them to rethink how they provide the unprofitable
regional feed traffic that is important for their longhaul networks. In so doing, this may provide an
opportunity for Flybe to step in either as a scheduled
flying substitute or, through a partnering arrangement,
as a lower cost white label provider.
Fuel prices remain the most difficult cost to control
across the industry. Our immediate needs are well met
with an extensive hedging programme that has 72.7%
of our next twelve months requirements provided for.
However, as we saw when fuel prices moved up in 2011
to its current levels in the $100 to $115 per barrel range
for Brent, there is always the possibility for another
step-change to come into effect. There is little that any
airline can do to minimise this as it is not possible, nor
desirable, to hedge over a highly extended period.
We would expect fuel price rises to be passed onto
customers in time.
There are a number of regulatory, policy and taxation
issues which act as a brake on delivering the optimal
set of outcomes across the industry. I will focus on
three EU Emissions policy, UK APD and London
runway capacity.
Firstly, emissions of greenhouse gases are a critical

issue for our industry. Flybe is one of the first airlines
to recognise the need to minimise these emissions
and invested early in new aircraft that were more fuel
efficient than their predecessors. Having completed
the fleet transition to Bombardier Q400 turboprops
the mainstay of our fleet and Embraer E-series jets in
2009, Flybe has been ahead of the rest of the industry,
where significantly older aircraft remain in place.
However, the EU regulation in relation to the Emissions
Trading Scheme was amended during the year to
exclude extra-EU operations. This means that airlines
which operate wholly within the EU, such as Flybe,
are at a competitive disadvantage versus other airlines
which do a mix of EU and extra-EU flying. An intra-EU
airline with a more fuel efficient fleet is being
discriminated against simply due to its flying footprint.
In a similar vein, Air Passenger Duty (APD) in the UK,
is another Government activity that does not achieve
arational economic outcome. APD is an inhibitor to
regional economic regeneration and hurts regional
operators like Flybe disproportionately, as it
discriminates against domestic travel in favour of
international and long-haul travel. APD was introduced
primarily as a revenue-raising mechanic that reflects
the lack of Duty on aviation fuel. However, unlike
such a Duty, it has never been rationally graduated.
The basic domestic rate for APD has rocketed 160%
from 5 for a one-way flight when it was introduced
in 1994, to 13 today, which on a domestic sector,
such as Newquay Gatwick of 215 miles, works out at
an average of 6p per mile. By way of contrast, the new
B and B rate for long-haul will be 71 from April 2015,
which, on a 3,400-mile trip to Bermuda, works out at
2p per mile; or 6,000 miles to Tokyo at 1.2p per mile.
There is absolutely no logic to such a discriminatory
tax regime.

Transforming Flybe
Continued
Furthermore, the regime discriminates even further

against UK domestic air travel. A round trip from
Southampton to Dublin (538 miles) incurs only one set
of tax, while a round trip from Birmingham to Edinburgh
(501 miles) suffers double taxation, as both sectors are
UK departures. This results in a clear price incentive
for people to travel abroad rather than within the UK.
On a flight that might cost only 30, a 13 tax levy is
very significant. Given this double taxation, it would
be much more equitable and ultimately much more
beneficial to the UK economy to introduce an even
lower APD charge on domestic or short sector routes.
Regional aviation is a key part of the UKs transport
infrastructure. Nearly half of Flybe passengers are
business people. These are busy people, the majority
of whom live in the UKs regions. They are poorly
served by Londons airports and the available rail links,
which principally go to and from London, and are
neither convenient nor practical. For the worker who
lives in the South West, for example, and commutes to
an oil job in Aberdeen, there is no practical alternative
to flying. Similarly, Edinburgh to Birmingham is an
appalling rail journey; Belfast to Manchester is, in part,
a long, slow ferry ride. Regional air transportation is
not a luxury. It is an essential part of a modern thriving
economy, especially when the regions account for 80%
of UK GDP. Flybe will continue to lobby the UK
Government to reform APD further to ensure regional
travellers do not have to pay a discriminatory tax levy.
The third issue concerns the Airports Commission
in the UK, led by Sir Howard Davies, which has been
charged with making recommendations in 2015 on new
runway capacity in the South East of England. Flybe is
concerned by the overwhelming focus of the Davies
Commission on global connectivity with larger jets that
will mainly benefit non-UK residents and those residing
in the South East. It seems to miss the crucial need for
connectivity for the tens of millions of UK residents
who live in the UKs regions. We believe that any
incremental runway capacity in or around London at a
national hub needs to have guaranteed, yet affordable,
take-off and landing slots for regional aircraft, allowing
the UK regions to connect to this hub.
What do you see as the key points

for the year ahead?
Our key task in 2014/15 is the full rebirth

of Flybe. This involves six key initiatives.
First, a full brand re-launch with single-minded focus

on a distinctive customer proposition: time-saving and
punctual travel for regional customers delivered with
a smile. Our new customer promise is to be The fastest
way from A to Flybe, faster than rail and road, and
aiming to be on-time, every time. The brand re-launch
involves the adoption of purple as our brand colour,
a new look and feel to our website, advertising,
aircraft livery and on-board presentation as well
as a reinvigorated product and service offering.
Among the many new products, services and
improvements which include simplified ticket
names our world-first 60:60 Guarantee is our way of
showing customers how much we appreciate that their
time is precious that any delay they might experience
is of consequence. Flybes punctuality has always been
well above industry average but we are determined
to do everything we can to ensure that every flight
arrives on-time. To demonstrate that commitment,
our 60:60 Guarantee means that if a flight arrives
more than 60 minutes late on stand for a reason
within Flybes control, customers will qualify
for a 60voucher to put towards their next
Flybe booking, ifmade within 60 days.
On-board, we are starting to roll out a number of new
enhancements. For example, we now offer small gifts
as our passengers depart the aircraft and we are
pleased to be one of the first airlines in Europe to
enable customers to use their portable electronic
devices in flight-safe mode from gate to gate. In June,
we will roll out our new contemporary, purple-themed
cabin crew uniform.
The improvements we are launching are designed
to reflect an exciting new era for Flybe, one with a
renewed commitment to delivering a great customer
experience. We are adopting purple not just as our new
brand colour, but as a signifier of a new way of doing
things. In the new Flybe, purple is a way of life. Purple
is all about the importance of People, Passion and
Performance. It is about Positivity and Playfulness.
Overview
Strategic report
Governance
Financial and
other information
60:60
Guarantee
It is about teamwork and One Flybe. It is about great

customer service and delivering on our commitments.
It is about reaching for the stars and being the best
possible airline we can be. We have already launched
astructured engagement programme to induct all
employees and business partners in the The Purple
Way. This will be followed up by the Flybe Loves
Service training programme through which we
are aiming to send every employee, as well as
representatives from our out-sourced service
providers, by the end of the year.
Second, 2014/15 will be about shifting out of the
recent retrenchment to start to grow again our core
scheduled branded UK business. Following the nine
new routes launched from Birmingham and Newquay,
we announced a major expansion at London City, and
we are keen to do more. We continue to evaluate both
new route and base opportunities as well as looking to
extend our range of codeshare partnerships with other
airlines. Codeshares enable us to offer our regional
customers one-stop to the world through hassle-free
transfers at our hubs onto to the long-haul routes
offered by partners.
financially and operationally. We will continue to

optimise this activity while we work with Finnair to
explore the opportunities of turning Flybe Finlands
branded scheduled flying business into profit,
orexiting from it as an activity.
Finally, we plan to complete our review of non-core
assets and implement a solution that optimises
shareholder value.
The above six developments herald a new beginning
for Flybe. As we move forward, we must remain
disciplined in everything we do. Discipline is vital to
secure our future. We need capital discipline to ensure,
as we return to growth, new aircraft deployment is
done prudently and we maximise the utilisation of
those aircraft. We need revenue discipline to ensure
our commercial activities are managed in a fact-based
and rigorous manner with a relentless focus on the
customer. We need cost discipline to safeguard the
gains of the painful restructuring we have been
through. Finally, we need organisational discipline
to ensure we never lose sight of the fact that we are
a people business and our strength is our people.
Third, we are focused on removing burdensome fleet

commitments both in the shape of grounded aircraft
and future aircraft obligations. As part of this, we will
engage with lessors on early hand back of the aircraft,
with flag carriers in Europe on both sub-leasing and
white label opportunities and with aircraft
manufacturers on redeployment or re-absorption
of future orders. We will also explore supplementary
flying opportunities within our UK business.
As we move forward, we will be guided by our

START values:
Fourth, we will continue to build management

capability in the business. We have already secured a
high quality CFO in Philip de Klerk to succeed Andrew
Knuckey; a new Company Secretary (Annelie Carver),
both of whom join us later in the year; a new MD for
our Finnish joint venture (Maunu Visuri) and a Head of
White Label Business Development (Jochen Schnadt).
Transparency: open, upfront, authentic and sharing.
Fifth, we will continue to optimise current white label

and franchising partnerships (Finnair, Loganair) and
build new ones (such as the arrangement to bring
inStobart Air to supplement Loganair as a franchise
partner). In Flybe Finland, the 22 aircraft providing
the white label service operated on behalf of our joint
venture partner, Finnair, are performing well both
Safety: no compromises
Teamwork: One Flybe; collaboration as a way of life
Alignment: embrace our goals and the The Purple Way
and act with urgency
Responsibility: take accountability and ownership
In summary, I believe that overall we have reasonably

clear skies ahead of us for 2014/15 and beyond and
Iam looking forward to building a profitable and
successful Flybe that is capable of exploiting the many
opportunities before it. We have the employees and
operational capability to become the best local airline
in Europe.
Flybe has a bright future, a purple future.
Viva Flybe!
Chairmans statement
People have a persistent and growing desire

to travel, be it for business, visiting friends and
family or recreation. Ground transport infrastructure
is becoming saturated in the UK, with inadequate
investment failing to provide sufficient capacity
to meet demand. The London-centric nature of the UK
transport debate dictates that transport infrastructure
investment is overwhelmingly spent there, and on
links to and from London; HS1, HS2, and Crossrail for
example. The aviation debate in the UK barely rises
above another runway for London. Heathrow declares
itself the UKs only hub airport, yet it has air links to
only seven UK airports.
Flybe has undergone great change

in the last 12 months, not only in its
management, but also in developing
its strategy and in cementing its
balance sheet strength. This has
secured strong foundations
for the successful turnaround
of this business.
Simon Laffin
Non-Executive Chairman
Flybe is different. Flybe serves 28 UK airports, taking

over 7 million passengers around the UK and from the
UK to other European destinations. We get on with the
business of carrying customers from A to B as quickly,
efficiently and respectfully as possible. All those
awkward journeys that otherwise would entail long
car, rail or ferry trips, become an easy hour or so flight;
Exeter to Glasgow, Edinburgh to Birmingham,
Guernsey to Southampton or Belfast City to
Manchester, for example.
Flybe operates from regional airports, where typically
the runway seems shorter than the terminal walkway
at Gatwick, and where checking-in is so much quicker
than even trying to park at Heathrow. These airports
are usually closer to where people live and work.
They are more convenient and reduce car journeys
to the airport as well as total journey times.
Regional aviation is a crucial part of the UKs transport
infrastructure. It is not a luxury. It is an essential part
of a modern thriving economy. So it remains a source
of amazement that the Government persists with
the arbitrary and discriminatory application of
Air Passenger Duty (APD), where a typical domestic
flight can be charged five times the tax per mile of
a long-haul one. This is exacerbated when a return
international flight suffers this charge once, but a
domestic one is taxed twice. Yet in the last Budget, the
Government actually reduced long-haul APD rates by
1 billion, while informing Flybe that it could not afford
to reduce domestic rates.
Overview
Strategic report
A momentous year for Flybe
Under Jim French, the previous Chairman and Chief

Executive Officer, the Board concluded that Flybe
needed to reduce its cost base significantly and a
programme of cost reductions was initiated. In August
2013, Jim stood down as Chief Executive Officer and
Saad Hammad joined in that role. Saad, who came with
a strong background in logistics and with easyJet,
made an immediate impact. He identified that even
more needed to be done to reduce costs to compete
in this market and that the business needed to upgrade
its processes and capabilities as well as to develop its
strategy further.
Jim stood down as Chairman at the beginning of
November 2013, and I joined the business as NonExecutive Chairman. Later that month, Saad presented
the Interim Results and announced his twin-engined
strategy of regional UK scheduled and white label
flying, underpinned by further cost reductions, working
with all suppliers, and a highly disciplined approach to
commercial and route profitability.
In March this year, shareholders contributed 155.7m
gross of new equity to provide funds to enable greater
resilience to the business, strengthening its balance
sheet, and also to fund growth in line with the new
strategy, as outlined by Saad. This has now been
focused into developing new routes and bases, further
efficiency gains and IT investment, fleet optimisation,
greater ownership of aircraft and expansion of white
label flying. A franchising agreement with Stobart
Air was announced covering six routes from
London Southend.
The following month, the strategy continued to be
rolled out, with five new routes announced from
London City airport, as well as a complete re-launch of
the Flybe brand; a new purple identity, website, aircraft
livery, staff uniforms and customer service initiatives.
Many of these are being rolled out over the summer
and the positive effect will accumulate over the
coming months.
Governance
Financial and
other information
The cost reduction programmes have, sadly, resulted

in over 1,000 job losses. Fortunately, through
impressive teamwork with both staff and unions, the
number of compulsory redundancies has been small.
We are, however, sad to have had to lose good and
loyal people from our workforce. Flybe has no option
but to remain competitive on cost. Total headcount
has now reduced by 29% over the financial year. The
turnaround has put a great deal of strain on many
employees who have put extraordinary levels of work
and commitment into restoring Flybe to financial and
commercial health. On behalf of the Board, I would like
to pay tribute to each and every employee who has
contributed to this; be they cabin crew, maintenance
staff, manager, pilot or administrator.
As already announced, there will be some further
job losses after this summer as seasonal routes are
discontinued and some further aircraft are grounded,
as planned. However, we believe that we are now
on the verge of emerging from this period of
retrenchment, and looking forward to future
considered and careful profitable growth. The early
precursors to this have already been announced with
additional routes from Birmingham, London Southend
and London City.
Board
Saad Hammad took over as Chief Executive Officer

in August 2013. We believe that Flybe has in Saad
a talented and inspirational leader. I became Chairman
in November last year. We have already announced
that Philip de Klerk will join the Board later this year
as Chief Financial Officer. Philip has a strong financial
pedigree from both Unilever and SAB Miller and
we very much look forward to him joining us.
Timo Anderson, former Director General of the
UK Military Aviation Authority, joined the Board
as a Non-Executive Director in May 2014, and brings
great experience of aviation, leadership and air safety.
Chairmans statement
Continued
Jim French, the former Chairman and Chief Executive

Officer, retired from the Board in November 2013 after
more than two decades working for Flybe/Jersey
European, building it into a major regional airline.
Mark Chown, Mike Rutter and Andrew Strong, resigned
from the Board as Executive Directors in August 2013.
Andrew Knuckey, Chief Financial Officer, will retire
from the Board in August this year. Andrew has played
a key role in the development of Flybe over the last
nine years, in particular supporting the turnaround
under Saad and this years successful capital raise.
Anita Lovell stood down as a Non-Executive Director
in May last year. Alan Smith has now served nearly nine
years on the Board and will retire as a Non-Executive
Director in August this year. Chris Simpson stood
down as Company Secretary in March this year, having
served in this role since before Flybes 2010 IPO and
before that as Finance Director.
General outlook
The general economic outlook in our most important

market, the UK, has improved with growth reported
in the year to December 2013 of 1.9% and most
commentators expecting 2014 to see growth
in the range of 2.4% to 3.5%. While this provides an
encouraging back-drop, it is important we continue
to ensure Flybe does not depend on positive macroeconomic conditions for its future success, and remains
focused on capacity, revenue and cost discipline.
While our deliberate actions last year to remove
unprofitable routes will continue to impact revenue and
profit into 2014/15, our disciplined focus, significantly
reduced cost base, strengthened balance sheet and
growth strategy, along with an encouraging macroeconomic backdrop, give the Board confidence of
delivering a good result for the current year and of
driving sustainable profitable growth over the
coming years.
For the time being, Andrew Knuckey has taken on the

role of Company Secretary, until Annelie Carver joins
as General Counsel and Company Secretary in June
this year. She is currently a partner in the Corporate
and Commercial team at Michelmores Solicitors.
I should like to thank all the departing Directors for
their hard work and commitment over many years and
wish the new Directors good health for the challenges
to come!
In view of the new standards of best practice and

regulations, we have made an additional statement
on this important area on page 45.
Results
This year has seen a significant improvement in

financial performance as a result of the efforts taken
to restructure the business. Adjusted profit before tax,
restructuring and surplus capacity costs for 2013/14
was 1.7m, which marks a significant improvement
on the prior years 23.6m loss, and reported profit
before tax was 8.1m (2012/13: loss before tax of
41.1m). The Group generated operating cash flow
before restructuring of 7.3m, and its net assets
at 31 March 2014 were 194.1m. These results are
in line with market expectations.
10
Simon Laffin
Chairman
Overview
Strategic report
Governance
Financial and
other information
PH
456M
PH
108M
H
70MP
Flybe... relaunch, rebrand,

renewal
11
Our twin-engine
business model
Our
Business
Regional
branded
airline
White
label
airline
Core proposition
ffordable, time-saving air travel with regional
A A
and international connectivity for both business
and leisure.
12
Core proposition
B
urnkey capacity solutions to national

T
European flag carriers by providing aircraft,
crew and maintenance.
Strategic report
Overview
To become
Europes
best local
airline
Safe operations
Safety is Flybes number one priority.
We are committed to developing, implementing,

maintaining and constantly improving strategies
and processes to ensure that all our aviation
activities take place under an appropriate
allocation of organisational resources, aimed
at achieving the highest level of safety
performance while delivering our services.
Market leading, regional white

label capability
Flybe is already the largest regional white label

provider in Europe, and has been delivering
white solutions to flag carriers in Europe and
beyond for more than a decade.
Aircraft under
management
10 98
Financial and
other information
Regional market focus

Our smaller aircraft can operate profitably
How we deliver value
Countries
Governance
Passengers
over
on lower volume regional routes and at more

convenient local airports, often with short
runways, serving both business and leisure
passengers. Competition comes primarily from
road, rail and/or ferry. Flybe offers faster, cost
effective access to the outside world, with
excellent punctuality and high frequency
services to other regions and to connecting hubs,
e.g. Manchester, Birmingham and Amsterdam.
Disciplined management process

Flybe has established a fact-based culture
and an analytically-grounded decision making

process. This enables the business to make
decisions rigorously and focus on the four
key metrics which drive value creation:
> Optimise passenger revenue per seat
> Ensure competitive unit costs
and productivity levels
> Drive efficient asset utilisation
> Optimise margin per white label aircraft
Routes
over
Airports
over
7.7m 200 64
13
Chief Executive Officers

statement
Overview
A reinvigorated Flybe
This year has seen a significant turnaround in
financial performance as a result of the efforts taken
to restructure the business. The 150.1m net raised in
March 2014s Firm Placing and Placing and Open Offer
provides Flybe with strength and a firm foundation for
profitable growth.
Flybes structure and activities
As reported in our H1 2013/14 results announcement
on 11 November 2013, the Groups divisions have been
removed and the business has been refocused into
One Flybe. We report three business segments:
2013/14 has seen the rebirth of Flybe.

Saad Hammad
Chief Executive Officer
ONE FLYBE
Flybe UK
UK
scheduled
airline
operations
UK
contract
flying
operations
MRO
Training
Academy
Flybe
Aviation
Services
Finland
Finnish
scheduled
airline
operations
Finnish
contract
flying
operations
The MRO provides service to third party customers

as well as the UK and Finnish operations
14
Overview
Strategic report
Governance
Financial and
other information
868.4m 7.7m
revenue under management
up from 781.5m in 2012/13
scheduled passengers
up from 7.2m in 2012/13
Key financial headlines
further Immediate Actions announced in November

2013. Combined, these initiatives delivered cost savings
of 47m in 2013/14, and this is expected to increase
to 71m in 2014/15.
Total revenue under

management
Less: joint venture revenue
Group revenue
Adjusted EBITDAR before
net restructuring costs 1
Adjusted profit/(loss) before
tax, net restructuring and
surplus capacity costs 2
Profit/(loss) after tax
Operating cash inflow/
(outflow) before
restructuring costs
Net funds/(debt) 3
2013
2014 (restated)
m
m
Change
%
868.4 781.5
(247.9) (167.2)
620.5 614.3
11.1
48.3
1.0
The Groups balance sheet at 31 March 2014 had

total cash, including restricted funds, of 218.4m
at 31 March 2014 (2013: 54.7m), and net funds
of 116.9m (2013: net debt of 66.3m).
55.7
The Business Review and Financial Review sections

set out the full detail behind the 2013/14 results.
98.9
63.5
1.7
8.1
8.0
(23.6)
(41.1)
(42.2)
n/m
n/m
n/m
7.3
116.9
(1.6)
(66.3)
n/m
n/m
Adjusted EBITDAR before restructuring defined as operating

profit/(loss) after adding back depreciation, amortisation
and aircraft rental charges and net restructuring costs
of 0.2m (2012/13: 8.0m).
2
Adjusted profit/(loss) before tax, restructuring and surplus capacity
costs defined as profit/(loss) before tax, net restructuring and
surplus capacity costs of 1.9m (2012/13: 12.8m) and revaluation
gains/(losses) on USD aircraft loans of 8.3m (2012/13: (4.7m)).
Surplus capacity costs represent the costs incurred in the year
relating to capacity that is considered by management to be surplus
as a result of restructuring decisions. See pages 23 and 24 of the
Financial Review for further detail.
3
Net funds/(debt) includes restricted cash of 40.5m at 31 March
2014 (2013: 31.4m).
Results
Flybe delivered a result for the year in line with
market expectations. Revenue under management,
including the full year impact of increased white label
flying in Flybe Finland, increased 11.1% to 868.4m
(2012/13: 781.5m). Group revenue increased 1.0%
to 620.5m (2012/13: 614.3m). Adjusted EBITDAR
before restructuring costs increased by 55.7% to
98.9m (2012/13: 63.5m), with an adjusted profit
before tax, gains on revaluation of USD aircraft loans,
net restructuring costs and surplus capacity costs of
1.7m (2012/13: loss of 23.6m) and a reported profit
before tax of 8.1m (2012/13: loss of 41.1m).
This significant improvement in Flybes trading
performance resulted mainly from the Turnaround
Plans announced in January and May 2013, and the
People
Our Turnaround Plan has involved considerable efforts
to reduce the cost base of the business. Unfortunately,
this process has resulted in the departure of over
1,100 people from the business through redundancy,
resignation or transfer to other organisations under
TUPE arrangements. While only nine of these
redundancies were compulsory, I do not underestimate
the effect of these difficult decisions on those staff
leaving and the friends and colleagues whom they
left behind.
On behalf of the entire Board, I would like to thank all
of our employees both past and present for their hard
work, support and resilience through what has proved
to be a very challenging period for the business
and its people.
Summary
2013/14 marks the rebirth of Flybe. Our turnaround
plan has enabled the business to return to profitability.
With our strengthened balance sheet following the
150.1m net fund raise, we can leverage our position as
Europes largest regional airline and start to implement
our twin-engine strategy of growing our UK branded
business and our white label operations across Europe.
With the strengthening of our balance sheet, the Group
is now stronger than it has ever been and is well placed
to deliver future profitable growth and become
Europes best local airline.
Saad Hammad
15
Business review
Flybe UK
2013/14 was a year which saw Flybe

UK return to profit as a result of
decisive management actions across
the business, and relentless focus on
five Cs Cash, Cost, Configuration,
Commercialisation and Confidence:
Cash
During the year, in addition to cost reduction measures,

we implemented a number of cash generation
measures, including the sale of our London Gatwick
slots to easyJet for 20.0m and the deferral
of 16 E175 aircraft from 2014/15 to 2017 to 2019.
Costs
Phases 1 and 2 of our Turnaround Plan were announced

in January and May 2013, and accelerated in November
2013 with a series of Immediate Actions designed to
further improve financial performance and resilience.
In total, more than 71m per annum of costs are
expected to be taken out of the business by 2014/15
with 47m having been achieved in 2013/14. Full details
of the turnaround can be found in the Financial Review.
Configuration
The Immediate Actions announced in November 2014

has led to significant changes in the way we operate.
By the end of March 2014, we had reduced the number
of UK aircraft bases from 13 to seven Belfast,
Birmingham, Edinburgh, Exeter, Glasgow, Manchester
and Southampton in order to reduce costs and
deliver improved operational efficiencies. This has
entailed a consolidation of crew and aircraft at the
bigger bases in order to achieve greater utilisation
of both the aircraft and the crew.
Flybe also continued to take a proactive approach
to capacity management by removing, or reducing
frequency on, a number of loss-making routes.
As a result, seats flown in 2013/14 fell by 1.4%
to 11.1m. However, commercial actions taken to
stimulate demand led to a 5.4pt improvement
in load factor to 69.5%, with passenger numbers
increasing by 6.9% to 7.7m.
16
Flybe continues to operate its fleet in a way that

optimises the use of the aircraft in service, responding
to market demands while at the same time managing
its existing fleet. As part of the strategic review
announced in November 2013, it was identified that
the fleet of 14 E195 118-seat regional jets were surplus
to Flybe UKs current capacity and route network
requirements. Therefore, 10 of these aircraft were
grounded at the end of March 2014. The four remaining
aircraft are currently being deployed, three on
scheduled flying and one on a short-term white label
operation for Aurigny. Of the total fleet of 14 aircraft,
five will be returned to lessors during 2014/15, three
are expected to continue flying through Winter 2014/15
and management is in discussions with a number of
airlines on possible white label or sub-leasing
opportunities for the remaining six.
Commercialisation
In addition to significant cost reductions, actions taken

by the new commercial team to stimulate passenger
numbers and improve unit revenues have helped the
business return to profitability. In addition to a number
of marketing enhancements, these actions included
offering more attractive lead-in fares which diluted
yields by 6.1% but led to a more than compensating
increase in load factors and passenger volumes despite
the 1.4% reduction in seat capacity. Load factor
improved by 5.4ppt to 69.5% and passenger numbers
increased by 6.9% to 7.7m, with a resulting 1.8%
improvement in passenger revenues per seat to 49.70.
The new commercial team has also adopted a rigorous
route assessment model for the evaluation of new
routes. Since November 2013, more than 100 routes
have been assessed using the model and, in February
2014, nine new routes were announced, which are to
date performing ahead of expectations.
One of the uses of the proceeds from the equity raise
has been to refresh Flybes brand, which had largely
remained unchanged since it was created in 2002:
>>Our
aircraft are being repainted in purple with a light

blue tail plane interleaved with yellow and red stripes.
The interiors are also being updated and the service
offering improved with purple mood lighting on
boarding, music playing and a chocolate treat to our
passengers on deplaning. The new uniforms being
introduced this summer pick up on this theme and
provide a new and improved look for our staff.
Overview
Strategic report
55.1%
(2012/13: 52.4%) UK regional sector share

(including our franchise partner, Loganair)
>>To
emphasise that one of Flybes key advantages

is its punctuality, we have introduced a 60:60
Guarantee. If a passenger experiences a delay of
more than 60 minutes for reasons within Flybes
control, they have 60 days to claim a 60 voucher
towards their next flight.
>>In
addition, we have made the website simpler

and easier to use and renamed our ticket types.
To date, the feedback to all these changes has been

very positive and we look forward to seeing their
continued impact on the business.
During the year, we have also entered into an
agreement with Stobart Air to join Loganair as a
franchise partner. Operations will be based at London
Southend utilising two aircraft, to commence in
June 2014.
Ensuring passengers arrive at their destination safely
and on time is core for any airline and 2013/14 was
another positive year for Flybe UK.
Of those airlines that operated more than 30,000 flights
during 2013 from the ten Civil Aviation Authority (CAA)
reporting airports, the statistics confirmed that Flybe
maintained its strong performance, delivering an 84.7%
(2012: 83.2%) on-time ranking for its reported sample
of 103,400 flights. The airlines performance across
our entire network was even better, with an 87.1%
(2012: 85.2%) on-time punctuality level, and was among
the best delivered in Flybes 12years of operations.
Confidence
Active engagement with our employees and their

Unions, as well as with business partners, suppliers,
regulators and investors has yielded a renewed
confidence in Flybe. The successful 150.1m net equity
fund raising completed in March 2014 is testament
to the strong support amongst investors for Flybes
new management and strategy.
Governance
Financial and
other information
28.3%
(2012/13: 28.1%) UK domestic sector share

(including our franchise partner, Loganair)
Sector share
Flybe continues to serve multiple customer segments.

During 2013/14, around 40% of Flybes passengers
were travelling on business, about a third visiting
friends and relatives (VFR), and the balance travelling
for holiday or leisure. Flybe will continue to adjust
itsnetwork to match customer needs during 2014/15
and beyond.
Flybes brand share of the UK domestic airline sector in
2013/14 was 28.3% (2012/13: 28.1%). Excluding London,
Flybes regional share was 55.1%, up from 52.4% in the
previous year.
Flybe Training Academy
Flybe continues to develop and promote talent within

the aviation industry through the training programmes
it provides at the Exeter Training Academy facilities.
The state-of-the-art building has 26 classrooms, a
simulator hall with two full flight Level D simulators,
cabin crew simulator hulls for safety and refresher
training, and an engineering apprentice workshop.
Qualifications offered include a flight deck Multi-Crew
Pilots Licence (under the first CAA-approved scheme
for a UK airline), cabin crew and customer service
NVQs, Foundation and Bachelor degrees, and
engineering aircraft type approvals.
Partnership with Brussels Airlines
Contract flying is not confined to Finland, with two

aircraft currently operating in Brussels Airlines colours.
Together with two aircraft that returned to Flybe at the
end of March 2014, this meant that four Q400 aircraft
operated throughout 2013/14 under this white label
arrangement.
17
Business review
Flybe Finland and MRO
Flybe Finland
Maintenance, Repair and Overhaul (MRO)
Revenues increased by 48.3% to 247.9m (2012/13:

167.2m) and the joint venture generated a significantly
reduced loss before tax of 1.0m (2012/13: loss before
tax of 6.5m). Flybes share of loss after tax in the joint
venture Flybe Finland was 0.5m (2012/13: 2.8m).
Flybe Aviation Services delivered a solid profitable

performance in 2013/14.
The contract with our joint venture partner, Finnair,

to fly Embraer E-Series regional jets and ATR
turbo-props on its behalf makes Flybe the largest
independent provider of white label services
in Europe with, including the Brussels Airlines activity,
4.2 million seats flown in 2013/14 (2012/13: 2.7 million).
The year has seen the bedding-in of the contract to fly

an additional 12 E190 jets, taking the number of aircraft
flying on a white label contract for Finnair to 22. This
white label contract has been a success both financially
and operationally, and recorded a profit before tax of
6.3m in 2013/14 (2012/13: 4.6m).
Less successful has been the existing commercial
flying programme in Finland, which, despite being
remodelled, continues to generate losses from the
six aircraft operated during the year. The scheduled
flying operation reported a loss of 7.3m in the year
(2012/13: 11.1m). Since the year end, two aircraft
have been returned to their owners on completion
of the lease term. Flybe is in discussions with
Finnair on further initiatives to improve the financial
performance in the scheduled flying operation.
Notwithstanding the challenges on scheduled flying,
the continuing transformation of Flybe Finland towards
being a profitable, self-financed, sustainable business
for the future bodes well towards meeting Flybes
stated strategic objective of white label expansion
in Europe.
18
In November 2013, the management structure of the

business was changed and each of the activities
re-organised along functional lines. Flybes MRO,
Flybe Aviation Services, is now managed as part
of the One Flybe approach as a profit centre and
it is reported as a separate segment.
The business is based in Exeter and continued to

provide third party maintenance coverage of the
BAE146/RJ, ATR turboprop and Bombardier Q400
aircraft types, as well as MRO services for Flybes
own fleet.
Revenue for 2013/14 was 35.4m (2012/13: 40.5m)
and Flybe Aviation Services delivered a profit before
tax of 2.2m (2012/13: loss before tax of 5.1m).
Man hours in the MRO decreased by 13.5%
to 455,000 hours (2012/13: 526,000 hours) following
the streamlining of the operation as a result of
restructuring activities. Of this total, some 59.1% was
for third party customers in 2013/14 (2012/13: 59.3%),
with the balance being work on behalf of Flybe.
Overall, Flybe Aviation Services has taken positive
steps to retain its position as a quality service provider
with its focus strongly placed on sustaining an efficient
cost base that enables it to react competitively to the
needs of an ever-changing and diverse regional
aircraft sector.
Saad Hammad
Strategic report
Overview
Governance
Financial and
other information
Strategy and KPIs
Flybes strategy is focused on becoming Europes best local airline.

Description
Key measures
Overall maximise stakeholder confidence

Safety underpins Well-developed safety procedures are in
everything
place to generate continuous improvement
we do
in performance see page 38.
Realise
Drive improvements in financial
value for
performance and the share price
shareholders
performance ofthe Group share price
low of 41p, to 139p on 6 June 2014.
Adjusted EBITDAR before net
restructuring and surplus capacity costs1
at 98.9m from 63.5m last year and
adjusted profit before tax, net restructur
ing and surplus capacity costs2 up from a
loss of 23.6m to a profit of 1.7m. Profit
before tax 8.1m (2013: loss of 41.1m).
Maximise
First benchmark survey to be run
employee
in 2014/15.
satisfaction
Regional branded airline

Commercialisation
Deliver growth
UK passengers were up 6.9% to
in passengers,
7.7m (2012/13: 7.2m), with load factor
revenue and
improving by 5.4 percentage points
passenger
(from 64.1% to 69.5%).
revenue
per seat
UK passenger revenue increased
to 553.9m (2013: 551.8m).
UK passenger revenue per seat has
grown to 49.70 from 48.84 in 2013.
Capitalise on
No. 1 in UK regional market (55.1% sector
leading positions share, up from 52.4% in 2013).3
in Flybes core
UK regional
No. 1 in UK domestic market (28.3%
and domestic
sector share, up from 28.1% in 2013).3
markets
Customer
satisfaction
First benchmark survey to be run

in 2014/15.
Complaints were 2.9 per thousand
passengers (2012/13: 2.8 per
thousand passengers).
Adjusted EBITDAR before restructuring and surplus capacity

costs defined as operating profit/(loss) after adding back net
restructuring and surplus capacity costs of 1.9m (2012/13: 12.8m),
depreciation, amortisation and aircraft rental charges. Surplus
capacity costs represent the costs incurred in the year relating
to capacity that is considered by management to be surplus
as a result of restructuring decisions. See pages 23 and 24
of the Financial Review for further detail.
2
Adjusted profit/(loss) before tax, restructuring and surplus capacity
costs defined as profit/(loss) before tax, net restructuring and
surplus capacity costs of 1.9m (2012/13: 12.8m) and revaluation
gains/(losses) on USD aircraft loans of 8.3m (2012/13: (4.7m)).
3
Includes passengers travelling with our franchise partner, Loganair.
4
Constant currency is calculated for the 2012/13 year by applying the
effective exchange rates that prevailed for reporting the 2013/14
results of $1.55 and 1.18.
Description
Key measures
Regional branded airline continued

Configuration
Deliver market
Customer satisfaction based on
leading
punctuality on-time departures
punctuality
within 15 minutes were at 84.4%
in 2013/14 (2012/13: 82.7%).
Deliver a
Bases reduced from 13 to seven in the year.
focused and
55 routes (40% of total) modified
productive
operation with
for Summer 2014 (30 culled, 25 with
the right aircraft frequency or gauge change).
on right routes
Fleet under management stable
at 98 aircraft with 10 grounded.
Aircraft utilisation up 1.9%
to 7.3 hours per day.
Costs
Deliver an
Group operating costs excluding fuel,
efficient
restructuring and surplus capacity
cost base
costs have decreased from 513.5m
to 497.8m.
Group operating costs at constant
currency4 per seat (excluding fuel) have
decreased from 46.18 to 44.85.
Cash
Ensure
Free cash at year end of 177.9m,
minimum free
equivalent to 15 weeks of 2013/14
cash balances
operating costs (2013: 2 weeks).
equivalent
to 10 weeks
operating costs
White label provider

Flybe Finland, currently operates
22 white label aircraft for Finnair.
In 2013/14, Flybe also operated four white
label aircraft for Brussels Airlines.
Flybe has strong relationships with other
major carriers, and discussions continue
on a number of incremental white label
opportunities.
Expand
white label
services in
Europe
As a result of the strategic review announced

on 11 November 2013 and the formation of a single
organisation structure for Flybe, the management
and purpose of both the MRO and the Training
Academy changed.
The focus of these businesses is now to provide the
achievement of a high quality service to the core airline
business at a cost that is as low as is achievable.
19
The Purple Way

Our story
Exeter
weekend
away
Time-saving air travel

is at the heart
of our business
Manchester
Client
meeting
Start
Safety
Teamwork
Alignment
Responsibility
Transparency
Edinburgh
Conference
By spreading
our wings but still
staying disciplined
Our great opportunity

is to connect both the
UK and Europe and be
one stop to the world
But its been very

painful to get ourselves
back on track
3
Guernsey
School
holiday
And with all of us

embracing our mission
together
London
Family
reunion
Well turn Flybe

into Europes best
local airline.
Viva Flybe!
20
Overview
Strategic report
Governance
Financial and
other information
Financial review
1.7m
adjusted profit before tax, net restructuring and

surplus capacity costs 1 (2012/13: loss of 23.6m)
8.1m
profit before tax (2012/13: loss before tax

of41.1m)
Summary
2013/14 has been a year of transformation for Flybe,

with significant actions taken to reduce the cost base
and to refocus the commercial operations of the
business. These have entailed the departure of over
1,100 employees, a reconfiguration of the routes we
serve and the closure of six bases at the end of March
2014. These actions, along with many others, have
enabled a return to profit from last years substantial
losses, on group revenue that was only slightly ahead
of 2012/13.
>>The
2013/14 has been a year

of transformation for Flybe,
with significant actions taken
to reduce the cost base and
to refocus the commercial
operations of the business.
Flybe UK business, which also comprises the

UK-based contract flying businesses, recorded an
adjusted profit before tax, restructuring and surplus
capacity costs 2 of 3.9m (2012/13: loss of 17.2m),
and a profit before tax 3 of 10.3m (2012/13: loss of
28.9m). We are one of the leading carriers of UK
domestic passengers with a 28.3% sector share, the
largest UK regional carrier for passengers outside
of London with a 55.1% sector share and our
passenger numbers grew by 6.9% to 7.7 million
(2012/13: 7.2 million).
>>The
MRO business, Flybe Aviation Services,

generated a profit before tax of 2.2m
(2012/13: adjusted profit before tax 0.7m
before restructuring and surplus capacity
costs of 5.8m, and a loss before tax of 5.1m).
Andrew Knuckey
Chief Financial Officer
Adjusted profit/(loss) before tax, net restructuring and surplus

capacity costs defined as profit/(loss) before tax, net restructuring
and surplus capacity costs of 1.9m (2012/13: 12.8m) and
revaluation gains on USD aircraft loans of 8.3m (2012/13: loss
of 4.7m). Surplus capacity costs represent the costs incurred
in the year relating to capacity that is considered by management
to be surplus as a result of restructuring decisions taken in 2012/13.
2
Flybe UK adjusted profit before tax, restructuring and surplus
capacity costs is the segment result after adding back group costs
of 3.6m (2012/13: 3.6m), net restructuring of 0.2m (2012/13:
4.1m) and surplus capacity costs of 1.7m (2012/13: 2.9m) and
revaluation gains on USD aircraft loans of 8.3m (2012/13: losses
of 4.7m). Surplus capacity costs represent the costs incurred
relating to capacity that is considered by management to be
surplus as a result of the restructuring decisions taken in 2012/13.
3
Flybe UK profit before tax is the segment result after
adding back group costs of 3.6m (2012/13: 3.6m).
21
Financial review
Continued
>>Flybe
Finland generated a loss from the joint venture

of 0.5m (2012/13: 2.8m) plus associated central
management costs of 0.3m (2012/13: 0.7m).
Flybe Finland did not deliver on its expectations
of generating profits in 2013/14 due to poor
performance on its scheduled flying operations, but
the return of two aircraft in Spring 2014 to their lessor
is expected to help reduce losses on scheduled flying
in 2014/15.
>>In
2013/14, Flybe has continued restructuring the cost

base of its UK-based businesses and refocused the
commercial and operational activities to enable
it to transform its financial performance and be
in a position to grow profitably. 10.7m was provided
in the 2013/14 income statement for restructuring
costs. However, 10.5m profit was recorded on the
sale of slots at London Gatwick, resulting in a net
0.2m restructuring and surplus capacity cost being
recorded in the income statement. With a further
1.7m of surplus capacity costs being incurred in
2013/14, total net restructuring and surplus capacity
costs stood at 1.9m. Other than ownership costs
on grounded E195 aircraft, we do not expect any
material further restructuring costs in 2014/15.
The benefits of these very painful measures are
significant, with 47m of year-on-year cost reductions
delivered for 2013/14 and a further 24m of cost
saving measures targeted for 2014/15.
>>Group
costs were in line with last year at 3.6m,

with a reduction in Board costs being offset
by higher advisor and other fees.
Following the successful firm placing and open offer

in March 2014, Flybe had net assets at 31 March 2014
of 194.1m, total cash of 218.4m, unrestricted cash
of 177.9m and net funds (i.e. total cash less
borrowings) of 116.9m.
Revenue under management has grown by 11.1% to
868.4m from 781.5m due to the Groups joint venture
with Finnair in the Nordic and Baltic region, Flybe
Finland. 2013/14 saw the first full year of operation
of the expanded E190 white label operations
on behalf of our joint venture partner, Finnair.
Group revenue increased by 1.0% to 620.5m, a
satisfactory performance against the backdrop of major
restructuring activities throughout the UK business and
a 1.4% reduction in seat capacity. Flybe UK has shown
considerable resilience over this period, maintaining
its UK domestic sector share at 28.3% and grown
overall passenger numbers by 6.9% to 7.7 million.
22
Adjusted EBITDAR before restructuring costs

increased to 98.9m, up 55.7% from the previous years
adjusted EBITDAR of 63.5m, and reported EBITDAR
increased 77.8% to 98.7m from 2012/13s 55.5m.
The Groups adjusted profit before tax was 8.3m
(2012/13: loss of 33.1m), and the reported profit
before tax was 8.1m (2012/13: loss before tax
of41.1m).
Set out below is a reconciliation from operating loss
to the adjusted EBITDAR figures. All EBITDAR metrics
are non-GAAP measures.1
EBITDAR is a common airline profit measure which
is used for making comparisons between airlines.
The adjusted EBITDAR measure presented removes
restructuring costs reported in the income statement.
Operating profit/(loss)
unadjusted
Depreciation and
amortisation 2
Aircraft rental charges
EBITDAR unadjusted
Net restructuring
costs reported in the
income statement
Adjusted EBITDAR before
net restructuring costs
2014
m
2013
(restated)
m
Change
%
0.8
(34.6)
n/m
14.3
83.6
98.7
12.0
78.1
55.5
19.2
7.0
77.8
0.2
8.0
n/m
98.9
63.5
55.7
The table below sets out a reconciliation from profit/

(loss) before tax to adjusted profit/(loss) before tax
which adjusts the result for net restructuring costs
(which include the profit on disposal of the take-off
and landing rights at London Gatwick to easyJet
reported in the income statement).

unadjusted
Net restructuring costs
reported in the
income statement
Adjusted profit/(loss)
before tax and net
restructuring

2014
m
2013
(restated)
m
Change
%
8.1
(41.1)
n/m
0.2
8.0
n/m
8.3
(33.1)
n/m
Overview
Strategic report
Governance
98.9m
adjusted EBITDAR before net restructuring costs

(2012/13: 63.5m)
Adjusted profit/(loss) before tax and net restructuring

is further adjusted to remove the revaluation (gain)/
loss on USD aircraft loans and the surplus capacity
costs within the business. This measure demonstrates
how adjusted profit/(loss) before tax and net
restructuring might have appeared if it had been
possible to remove these surplus capacity costs arising
from restructuring decisions taken in 2012/13.
before tax and net
restructuring
Surplus capacity costs3
Revaluation (gain)/loss
on USD aircraft loans
before tax, net
restructuring and
surplus capacity costs
2014
m
2013
(restated)
m
Change
%
8.3
1.7
(33.1)
4.8
n/m
n/m
(8.3)
4.7
n/m
1.7
(23.6)
n/m
The adjusted profit/(loss) before tax figures given

above are non-GAAP measures.1
Financial and
other information
98.7m
unadjusted EBITDAR (2012/13: 55.5m)
Restructuring the business
The costs incurred in restructuring Flybes business

were as follows:
Incurred
in
2013/14
m
Redundancies
Legal, professional and
other support costs
Other restructuring
costs
Restructuring costs
Profit on London
Gatwick slot sales
Net restructuring
costs reported in the
income statement
Total
Incurred incurred since
in
restructuring
2012/13 announcement
m
m
(9.6)
(5.5)
(15.1)
(1.1)
(1.2)
(2.3)
(1.3)
(1.3)
(8.0)
(18.7)
(10.7)
10.5
10.5
(0.2)
(8.0)
(8.2)
Surplus capacity costs
(1.7)
(4.8)
(6.5)
Restructuring and
(1.9)
(12.8)
(14.7)
Non-GAAP measures exclude amounts that are included in the

most directly comparable measure calculated and presented in
accordance with IFRS, or are calculated using financial measures
that are not calculated in accordance with IFRS. The reconciliations
above describe how the non-GAAP measure is determined from
the most directly comparable measure calculated and presented
in accordance with IFRS. The non-GAAP measures are not regarded
as a substitute for, or to be superior to, the equivalent measures
calculated and presented in accordance with IFRS or those
calculated using financial measures that are calculated in
accordance with IFRS. The non-GAAP measures described may
not be directly comparable with similarly-titled measures used
by other companies.
2
Excludes depreciation on maintenance assets set up in accordance
with IFRS requirements.
3
Surplus capacity costs represent the costs incurred relating
to capacity that is considered by management to be surplus
as a result of the restructuring decisions taken in 2012/13.
Other than ownership costs on grounded E195 aircraft,

management does not expect to incur significant
further restructuring costs in 2014/15.
Legal, professional and other support costs have been
incurred on negotiating the redundancies mentioned
above as well as on providing outsourcing services to
those leaving Flybe. However, the major cost in this
area is in relation to the provision of specialist services
around procurement that have helped us to negotiate
better terms in relation both to rates and payment
periods from our supplier base.
Other restructuring costs in 2012/13 related to reducing
space occupied at the many airports Flybe serves,
particularly as the outsourcing of services has reduced
the need for Flybe itself to have local facilities.
In 2012/13, steps were taken to improve the efficiency
of the UK-located businesses, leading to surplus
capacity in respect of aircraft (and also crew and
maintenance staff in 2012/13) being identified and
incurred in both this year and the previous one. The
cost savings that would have been made had we been
able to remove these costs is highlighted above as
23
Financial review
Continued
surplus capacity costs. Because these costs formed

a part of the operating cost base during the periods
under review, it is not possible to identify these costs
separately within the Financial Statements.
These restructuring costs set out on page 23 and the
related actions are targeted to deliver the following
cost savings:
Generated
Generated
in 2013/14
in 2012/13 (cumulative)
m
m
Staff cost reductions

Business efficiency
and outsourcing
Supplier costs
Total
Targeted
cumulative
annualised
savings
from
2014/15
onwards
m
22
42
1
2
3
17
8
47
15
14
71
Other than for staff costs where headcount reduction

has been the prime driver, other cost lines have
benefited from the general renegotiation of rates and
payment terms across the supplier base, and from
outsourcing activities and marketing and distribution
cost savings.
Of the 71m target cumulative annual savings from
2014/15 onwards, 30m has been identified as being
part of Phase 1 announced in January 2013, and these
projects are complete. Phase 2, announced in May
2013, is expected to deliver annualised savings of 15m,
and these projects are almost complete. The further
Immediate Actions announced in November 2013 are
expected to deliver a further 26m of savings from
2014/15 onwards, and projects comprising some 65%
of this target have been completed.
Fleet
Flybe UK
In 2013/14, Flybe UK took delivery of a further two
E175 regional jets from Embraer (out of its firm order
for 35 E175s), taking the total delivered to 11. No further
aircraft are contracted for delivery until October 2015.
2013/14 saw the sale of two Q400 owned aircraft
for a modest book profit.
During the year, four Bombardier Q400 aircraft were
operated on a contract flying agreement with Brussels
Airlines that commenced in March 2012. Two of these
24
aircraft returned to Flybe service in April 2014 with the

remaining pair being scheduled to complete their
contracts by the end of October 2014.
Five E195 regional jets are expected to be handed back
to lessors in 2014/15 two are contracted to return in
the year, and agreement has been reached with
another lessor for the early hand back of a further
three E195s (originally scheduled for return in 2015/16).
Five Q400 aircraft are contracted to return to lessors
in H1 2014/15. These aircraft are being purchased postyear end from the lessors in order to provide capacity
for the expansion at London City commencing in late
October 2014.
Flybe Finland
One ATR 42 was returned at the end of its operating
lease to the owner in May 2014 with a further ATR 42
due to be returned later in June 2014.
Embraer E175 order
In July 2010, Flybe UK announced the firm order
of 35 Embraer 175s for delivery between 2011 and 2016.
Options over a further 65 E-series regional jets were
cancelled in November 2013. Flybe UK retains 40
Embraer aircraft purchase rights that do not lapse until
November 2017.
In May 2013, Flybe and Embraer agreed delivery
deferrals for 16 aircraft due for delivery in 2014 and
2015 to the period from 2017 to 2019, and a further six
aircraft that were due for delivery in 2016 were
deferred to 2019. In November 2013 two of the four
aircraft due for delivery in 2013/14 were deferred to
October and November 2015.
The following table shows the current number of
aircraft that are contracted for delivery to the Group.
No aircraft are due to be delivered to Flybe Finland.
Embraer E175
regional jet
Flybe UK
2015/16
2016/17
2017/18
2018/19
2019/20
Total
3
5
3
6
7
24
Strategic report
Overview
Governance
Financial and
other information
98
aircraft, 70 in Flybe UK and 28 in Flybe Finland
Business results
Fleet under management

The profile of Flybes fleet under management in the
2013/14 year is summarised below:
Flybes results analysed by segment are summarised

below. These results are before tax, other than share
of joint venture results.
Number of aircraft
Number
of seats
UK Airline
Embraer E195
regional jet
Embraer E175
regional jet
Bombardier
Q400 turboprop
Net
movements
in period
At
31 March
2014
118
14
14
88
11
78
47
70
(2)
45
70
2
12
2
12
12
28
98
12
28
98
88
89
Flybe Finland
ATR 42 turboprop
48
ATR 72 turboprop 68-72
Embraer E170
regional jet
76
Embraer E190
regional jet
100
Total
Held on
operating lease
Owned and
debt financed
Total
Total seats in fleet
Average seats
per aircraft
Average age
of fleet (years)
At
31 March
2013
10
98
8,390
(1)
9
98
8,410
85.6
85.8
5.1
5.9
As at 10 June 2014, following the return of four Q400

turboprop aircraft and purchase of the same four
Q400 turboprop aircraft by Flybe UK and the return
of one leased ATR42 by Flybe Finland, the Groups
fleet under management was 97 aircraft, consisting
of 45 Q400s, 13 ATR turboprops, and 39 E-series jets
of which 13 are owned and 84 leased.
The Group will continue to match capacity to demand,
particularly in its core UK market. As at 10 June 2014,
some 10 E195 aircraft were grounded, and Flybe is in
active discussions with a number of airlines whereby
these aircraft could be deployed under white label
operations or sub-leased.
2014
m
Business revenues:
Flybe UK
Flybe Finland
MRO
Inter-segment sales
Revenue under management
Less: Revenue from
Flybe Finland joint venture
Group revenue
Business adjusted profit/(loss)
before tax:
Flybe UK1
Flybe Finland
MRO2
Group costs
Group adjusted profit/(loss)
before tax, net restructuring
and surplus capacity costs3
Restructuring and surplus
capacity costs
Revaluation gain/(loss)
on USD aircraft loans
Group profit/(loss) before tax
2013
(restated)
m
599.6
247.9
35.4
(14.5)
868.4
589.4
167.2
40.5
(15.6)
781.5
(247.9)
620.5
(167.2)
614.3
3.9
(0.8)
2.2
(3.6)
(17.2)
(3.5)
0.7
(3.6)
1.7
(23.6)
(1.9)
(12.8)
8.3
8.1
(4.7)
(41.1)
Flybe UK adjusted profit before tax, restructuring and surplus

capacity costs is the segment profit of 6.7m (2012/13: segment loss
of 32.5m) after adding back group costs of 3.6m (2012/13: 3.6m),
net restructuring of 0.2m (2012/13: 4.1m) and surplus capacity
costs of 1.7m (2012/13: 2.9m) and revaluation gains on USD
aircraft loans of 8.3m (2012/13: losses of 4.7m).
2
MRO adjusted profit before tax, restructuring and surplus capacity
costs is the segment profit of 2.2m (2012/13: segment loss of
5.1m) after adding back restructuring of nil (2012/13: 3.9m)
and surplus capacity costs of nil (2012/13: 1.9m).
3
Adjusted profit/(loss) before tax, net restructuring and surplus
capacity costs defined as profit/(loss) before tax, net restructuring
and surplus capacity costs of 1.9m (2012/13: 12.8m) and
revaluation gains on USD aircraft loans of 8.3m (2012/13: loss of
4.7m). Surplus capacity costs represent the costs incurred in the
year relating to capacity that is considered by management to be
surplus as a result of restructuring decisions taken in 2012/13.
25
Financial review
Continued
Operating costs, excluding restructuring

and surplus capacity costs
Flybe UK
Revenue
2014
Passenger
revenue
Contract flying
Other revenue
Total revenue
2014
2013
per seat
per seat
553.9
16.2
29.5
599.6
49.70
551.8
12.6
25.0
589.4
48.84
Flybe UKs passenger numbers were up 6.9%

at 7.7 million versus 7.2 million in 2012/13, despite the
active management of seat capacity, which reduced
by 1.4% to 11.1 million.
Passenger revenue per seat was 1.8% higher at 49.70
(2012/13: 48.84), comprising an increase in load factor
of 5.4 percentage points (from 64.1% to 69.5%) and
a reduction in passenger yield from 76.16 to 71.55.
The increase in passenger revenue per seat of 1.4% was
offset by the 1.8% reduction in seat capacity, meaning
that passenger revenue increased by 0.4% from
551.8m to 553.9m.
Contract flying for Brussels Airlines generated
revenues of 16.2m for the provision of four crewed
Q400 turboprops in arrangements lasting up to two
years, and expiring in April (two aircraft) and October
2014 (remaining two aircraft). Other revenue in Flybe
UK totalled 29.5m, representing an 18.0% increase on
the 25.0m generated in 2012/13, and arose primarily
from increases in charter and code-share revenues and
sale of surplus fixed assets, with other revenue streams
remaining broadly stable.
26
2013
per seat
(restated) 1
Fuel and aircraft

operations
315.8 28.45 309.8
Aircraft
ownership and
maintenance
152.2 13.71
141.3
Staff and other
net operating
expenses
129.9 11.70 157.0
Operating costs 597.9 53.86 608.1
per seat
per seat
at
constant
currency2
27.42
28.11
12.50
12.74
13.89
53.81
13.91
54.76
Operating costs for 2012/13 have been restated to reflect the

change in segments.
2
Constant currency is calculated for the 2012/13 year by applying the
effective exchange rates that prevailed for reporting the 2013/14
Flybe UK analysis of operating costs

(before restructuring and surplus capacity costs)
FLYBE UKS
COSTS
Fuel
20.1%
Aircraft operations
32.7%
Aircraft ownership
and maintenance
25.5%
Staff
13.8%
Other operating costs
7.9%
Strategic report
Overview
Governance
49.70
Financial and
other information
6.9%
Flybe UK passenger revenue per seat,

up 1.8% from 48.84 in 2012/13
Flybe UK passenger numbers increased

to 7.7 million (2012/13: 7.2 million)
Flybe UK operating cost per seat, excluding restructuring and surplus capacity costs ()
57
(0.97)
56
(0.95)
55
54
(54.76)
0.25
1.74
(0.60)
0.13
(53.81)
0.33
(53.86)
53
2012/13
Operating cost
per seat
Foreign
exchange
2012/13
Operating cost
per seat at
constant currency
Fuel
Net airport, en
route charges
and ground
operations
Operating costs decreased by 1.7% from 608.1m

to 597.9m largely as a result of a 17.3%, or 27.1m,
saving in staff and other net operating costs following
implementation of the Turnaround Plan and Immediate
Actions. This saving was offset by a 7.7% increase
in aircraft ownership and maintenance costs due
to a larger average fleet in the year (70 aircraft
versus 68 in 2012/13), higher maintenance costs
and unfavourable foreign exchange movements.
In addition, fuel and aircraft operations costs increased
by 1.9% as a result, mainly, of increases in airport and
navigation charges. On a constant currency basis,
underlying operating costs decreased by 3.4% from
618.8m in2012/13 to 597.9m.
On a constant currency, operating costs per seat
decreased by 1.6% from 54.76 to 53.86, again
driven by a significant reduction in staff and other
net operating costs (down 15.9% to 11.70), offset
by increases in aircraft ownership and maintenance
(up 7.6% to 13.71) and fuel and aircraft operations
(up 1.2% to 28.45).
Fuel
Flybe UKs results are subject to significant change as
a result of movements in the price of fuel which forms
a significant variable cost for this business. Although
2013/14 has seen a reduction in volatility for fuel prices,
it has been at the expense of that price stabilising at a
relatively high level Brent crude has been in the $100
to $115 a barrel range for most of the year. Overall, the
price of jet fuel was slightly lower than in 2012/13,
peaking at $1,047 per tonne on 29 August 2013. Flybe
Aircraft
ownership and
maintenance
costs
Staff costs
Marketing and
distribution
costs
Other
operating
expenses
2013/14
Operating cost
per seat
UKs fuel costs decreased to 120.0m in 2013/14 from

122.6m in 2012/13. Aviation fuel prices remain capable
of large and unpredictable movements due to a variety
of external factors, such as changes in supply and
demand for oil and oil-related products and the role
of speculators and funds in the futures markets.
During the year to 31 March 2014, Flybe UK used some
175,200 tonnes of jet fuel, a reduction on 2012/13 of
2.3% from 179,300 tonnes. The average market price
during the year was $974 per tonne (2012/13: $1,018),
with the Group paying a blended rate (net of hedges)
of $982 per tonne (2012/13: $1,002). Including into
plane costs, Flybes fuel costs in 2013/14 of 120.0m
(2012/13: 122.6m) represent an all-in cost of
$1,062 per tonne for 2013/14 (2012/13: $1,101).
Using constant currency, our fuel costs per seat
decreased from 11.06 to 10.81.
Flybe UK operates a policy of managing fuel price
volatility by entering into derivative contracts
representing a portion (between 60% and 90%)
of its aviation fuel requirements a minimum of 12
months forward, from the current date. The intention
of this programme is to provide a significant element
of certainty over its fuel costs for any forthcoming
IATA season. As at 6 June 2014, 75.2% of the year
to 31 March 2015 was hedged at an average price
of $960 per tonne. Further details are given in note 36
to the Consolidated Financial Statements. Taking into
account our hedged position, each $50 increase/
decrease in the price of jet fuel reduces/improves
group profits in 2014/15 by 2.0m.
27
Financial review
Continued
Efficiencies have been derived from our fleet

replacement programme, operational improvements
and careful management of routes and frequencies.
Overall, 15.7kg of fuel was consumed for each seat
flown (2012/13: 15.9kg per seat). This remains
a significant improvement on the 19.1kg per seat
consumed in 2007/08 due to our investment
in a modern, fuel-efficient two-type aircraft fleet
best suited to regional flying.
Operating costs, including restructuring
and surplus capacity costs
2014
per seat
2013
(restated) 1
per seat
Fuel and aircraft

operations
315.8 28.45 309.8 27.42
Aircraft
ownership and
maintenance
153.9 13.86 142.5
12.61
Staff and other
net operating
expenses
130.1
11.71 162.8 14.41
Operating costs 599.8 54.02
615.1 54.44
per seat
at
constant
currency2
28.11
12.85
14.42
55.38
Operating costs for 2012/13 have been restated to reflect the

change in segments.
2
Constant currency is calculated for the 2012/13 year by applying
the effective exchange rates that prevailed for reporting the 2013/14
Restructuring and surplus capacity costs

The business incurred costs of restructuring and
surplus capacity as follows:
Redundancies
Legal, professional and
other support costs
Other restructuring costs
Restructuring costs
Profit on London Gatwick
slot sales
reported in the income
statement
Surplus capacity costs
Restructuring and
Incurred
in 2013/14
m
Incurred
in 2012/13
m
Total
incurred
since
restructuring
announcement
m
9.6
2.8
12.4
1.1
10.7
1.2
0.1
4.1
2.3
0.1
14.8
(10.5)
(10.5)
0.2
1.7
4.1
2.9
4.3
4.6
1.9
7.0
8.9
These costs are discussed in more detail on pages 23

and 24.
Net finance costs
Net finance costs improved by 13.7m due to
a 13.0m non-cash, non-underlying movement on the
retranslation of US Dollar denominated debt used to
fund the acquisition of aircraft, particularly the newer
E175 regional jets, from a loss of 4.7m in 2012/13
to a gain of 8.3m in 2013/14. The movement
in this US Dollar liability cannot be naturally offset
against the value of the aircraft as the latter are
recorded in pounds Sterling in order to comply with
the requirements of International Financial Reporting
Standards. This income statement charge has therefore
been removed in arriving at adjusted profit before tax.
Foreign exchange
The Group foreign currency hedging policy has an
objective to reduce the volatility of costs. Flybe
manages its foreign exchange positions based on its
net foreign currency exposure, being foreign currency
expenditure less associated revenue. Flybe UK
currently has a relatively small net exposure to the
28
Overview
Strategic report
Governance
Euro, but has significant US Dollar costs in relation to

fuel, maintenance, aircraft operating leases and loan
repayments. The Group generates no significant
USDollar revenue and actively manages its US Dollar
position through a foreign exchange forward purchase
programme similar to that outlined for fuel. As at
6 June 2014, 72.2% of our anticipated US Dollar
requirements for the year to 31 March 2015 were
hedged at an average exchange rate of $1.59.
Allexisting derivative financial instruments are
forward swap arrangements.
Taking into account our hedged position, each $0.05
reduction/improvement in the US Dollar exchange rate
has the effect of reducing/increasing Flybe UKs profits
in 2014/15 by approximately 4.4m.
Carbon emissions
The Group is required to purchase carbon allowances
for all flights departing from and arriving into the EU
in order to offset its carbon footprint in each calendar
year. Flybe manages its exposure by purchasing carbon
emissions allowances through a forward purchase
programme to top up the free allowances awarded to it
under the scheme. The table below sets out Flybe UKs
emissions and carbon allowances for each of the
periods under review:
Calendar year
Anticipated carbon
allowances required, tonnes
Free allowance allocation, tonnes
Proportion hedged at beginning
of period
Effective carbon rate
2014
Budget
2013
Actual
494,800 555,900
259,800 259,800
99%
5.52
53%
4.00
Financial and
other information
Flybe Finland
Flybe Finlands results are summarised as follows:
Flybe Finland joint venture

Revenue
Contract flying
Passenger revenue
Other revenue
Costs
Fuel
Other operating costs
White label
Scheduled flying
Total
Tax
Loss after tax
60% share of Flybe Finland
joint venture loss
Other net costs including interest
Business result Flybe Finland
2014
m
2013
m
216.7
26.9
4.3
247.9
132.4
30.6
4.2
167.2
(62.3)
(186.6)
(248.9)
(41.3)
(132.4)
(173.7)
6.3
(7.3)
(1.0)
0.2
(0.8)
4.6
(11.1)
(6.5)
1.6
(4.9)
(0.5)
(0.3)
(0.8)
(2.8)
(0.7)
(3.5)
With revenue of 247.9m (2012/13: 167.2m) and

costs of 248.9m (2012/13: 173.7m), Flybe Finland
generated a significantly smaller loss before tax of
1.0m (2012/13: 6.5m loss). A tax credit of 0.2m
relating to deferred tax on the losses generated was
also reported, resulting in a loss after tax for Flybe
Finland of 0.8m (2012/13: loss after tax 4.9m). The
small loss remains disappointing, although there has
been a significant turnaround from the previous year.
Flybe Finlands white label operation for
Finnair accounted for 2.7 million passengers
(2012/13: 1.6 million passengers). Contract flying
will continue to dominate this business and this
white label activity recorded a profit of 6.3m
(2012/13: 4.6m).
29
Financial review
Continued
In the six aircraft scheduled flying operation, passenger

numbers on commercial flying represented 0.3 million
passengers (2012/13: 0.4 million) with a load factor of
44.0% (2012/13: 41.8%), and the business reported a
loss of 7.3m (2012/13: 11.1m loss). In addition to the
removal of two lines of flying from Summer 2014,
further action is necessary to improve financial
performance in Flybe Finlands scheduled flying,
and Flybe is in discussions with Finnair on a number
of actions.
The exposures of Flybes joint venture in Finland
to fuel price and exchange rate volatility have been
monitored during 2013/14, but no hedging has yet
been undertaken due to the minimal nature of the
underlying exposure. This is because Flybe Finlands
leases are denominated in Euros, its main operating
currency, leaving fuel prices and US Dollar exposure
on fuel and maintenance costs as its primary
exposures. These costs are currently smaller exposures
to the business and are related to the commercial
rather than contract flying operations. Management
will continue to monitor these exposures and hedge
them should they become significant.
Central overhead costs, net of interest amounted to
0.3m (2013: 0.7m). Further details on the joint
ventures performance are given in note 16 to the
Financial Statements.
MRO
Revenue
Operating costs before
restructuring and surplus
capacity costs
before tax, restructuring
and surplus capacity
costs
Restructuring and surplus
capacity costs
2014
m
2013
m
35.4
40.5
(33.2)
(39.8)
Change
%
(12.6)
16.6
2.2
0.7
n/m
2.2
(5.8)
(5.1)
n/m
n/m
MRO revenue declined by 12.6% in 2013/14 to 35.4m

(2012/13: 40.5m), of which 20.9m was for third party
customers (2012/13: 24.9m). This decrease was driven
by the 13.5% decline in man hours from 526,000 hours
30
in 2012/13 to 455,000 hours. This, in turn, resulted from

lower fixed costs and available capacity in the MRO
business following phases 1 and 2 of the Turnaround
Plan. This cost reduction programme led to a 16.6%
reduction in operating costs from 39.8m to 33.2m,
and a significantly improved profit performance.
Restructuring and surplus capacity costs
The division incurred no costs of restructuring and
surplus capacity in the year, compared with 3.9m
of restructuring and 1.9m of surplus capacity costs
incurred in the prior year. These costs are discussed
in more detail on pages 23 and 24.
Group costs
Group costs of 3.6m (2012/13: 3.6m) include Group

Board salary costs and group related legal and
professional fees. The reduction in Board costs in the
year has been offset by higher advisor and other fees.
Profit/(loss) before and after tax
The Groups adjusted profit before tax, revaluation

gain on USD aircraft loans, restructuring and surplus
capacity costs was 1.7m (2012/13: loss of 23.6m).
After net restructuring and surplus capacity costs
of 1.9m (2012/13: 12.8m) and non-cash gains
on USD aircraft loans of 8.3m (2012/13: loss of 4.7m),
the Groups reported profit before tax was 8.1m
(2012/13: 41.1m loss).
Profit after tax was 8.0m (2012/13: loss after tax
42.2m). The current year tax charge was 0.1m
(2012/13: 1.1m).
EPS and dividends
Basic earnings per share for the year were
9.6p, compared with loss per share of (56.0)p
in 2012/13. Adjusted loss per share (see note 13
to the Consolidated Financial Statements) was
(0.2)p, compared with adjusted loss per share
of (39.1)p for 2012/13.
No dividends were paid or proposed in either
the current or prior financial year.
Strategic report
Overview
Governance
Financial and
other information
218.4m 194.1m
total cash including restricted cash
(2012/13: 54.7m)
total assets (2012/13: 48.1m)
Cash flow
Net cash inflows from operating activities before

restructuring were 7.3m (2012/13: outflow of 1.6m).
However, the cash flows as a result of restructuring
have resulted in an overall net cash outflow from
operating activities after restructuring of 5.5m
(2012/13: outflow of 3.0m).
Net cash inflow/(outflow)

from operating activities
before restructuring
Cash flows from
restructuring activities
Net cash outflow from
operating activities
after restructuring
Net proceeds from
issuing new equity
Net capital income/
(expenditure) after
disposal proceeds
Net (repayment)/
proceeds from new loans
Acquisition of joint
venture interest
Net interest paid
Net increase/(decrease)
in cash and cash
equivalents
Cash and cash
equivalents
at beginning of year
Cash and cash
equivalents at end
of year
Restricted cash
Total cash
2014
m
2013
m
7.3
(1.6)
8.9
(12.8)
(1.4)
(11.4)
(5.5)
(3.0)
(2.5)
150.1
Change
m
150.1
21.7
(33.0)
54.7
(10.7)
18.5
(29.2)
(0.3)
(1.8)
0.3
0.8
154.6
(19.6)
174.2
23.3
42.9
(19.6)
177.9
40.5
218.4
23.3
31.4
54.7
154.6
9.1
163.7
(1.0)
The most significant cash flow benefit was the

150.1m of net cash proceeds from the issue
of new equity on 12 March 2014.
The largest movements in net capital income were
proceeds of 17.5m being received from easyJet on
sale of the slots at London Gatwick, 12.3m proceeds
from sale of two Q400 aircraft in May and 11.8m
in relation to pre-delivery deposits for new aircraft
being returned to Flybe during the year following
negotiations with Embraer to reschedule deliveries.
Repayment on loans exceeded those drawn down
on a new loan related to the acquisition of an Embraer
E175 regional jet.
Group cash flow (m)

250
200
150.1
(12.4)
Net proceeds
from equity
fund raise
Financing
activities
40.5
218.4
Restricted
cash
Total cash
at March 2014
177.9
150
100
50
23.3
8.0
14.3
(5.9)
(12.8)
(9.1)
22.4
0
Free cash at
March 2013
Profit for
period
Depreciation
and
amortisation
Net working
Restructuring
capital before
and
restructuring
surplus
costs
capacity costs
Transfer to
restricted
cash
Investing
activities
(including
slot sales)
Free cash
at March 2014
31
Financial review
Continued
Balance sheet
London Gatwick
landing slots
Aircraft
Other property, plant
and equipment
Interest in joint ventures
Net funds/(debt)
Derivative financial
instruments
Other working capital net
Deferred taxation
Other non-current
assets and liabilities
Net assets
2014
m
2013
m
147.0
8.5
140.4
(8.5)
6.6
23.6
12.4
116.9
25.0
13.2
(66.3)
(1.4)
(0.8)
183.2
(7.6)
(105.4)
4.5
4.2
(81.5)
2.0
(11.8)
(23.9)
2.5
2.7
194.1
2.6
48.1
0.1
146.0
Change
m
All of Flybes landing slots were sold to easyJet for

a gross cash consideration of 20.0m. The sale was
approved by shareholders on 2 August 2013 with
7.5m of cash deposit received on that day, 10.0m
in November 2013 with the balance of 2.5m received
in May 2014.
The 147.0m of net book value of aircraft represents
owned aircraft, engines and aircraft modifications,
with one further Embraer E175 aircraft being acquired
with debt finance.
After Flybes share of joint venture losses of 0.5m
in 2013/14 plus associated central management costs
of 0.3m, the carrying value of the interest in joint
ventures at 31 March 2014 stood at 12.4m
(2013: 13.2m).
Net funds at 31 March 2014 of 116.9m (2013: net debt
of 66.3m) benefited from the 150.1m of net cash
proceeds from the issue of new equity on 12 March
2014 and reflected the capital inflows referred to in the
cash flow section on page 31. Borrowings decreased by
19.5m to 101.5m as a result of the new loan to fund
an Embraer E175 delivered during the year being less
than the loans on the two Q400 aircraft sold during
the year (classified as assets held for sale at 31 March
2013) and normal repayments on loan agreements.
Netfunds at 31 March 2014 includes restricted cash
of40.5m (31.4m at 31 March 2013) which represents,
predominantly, cash held with the Groups bankers
32
tofacilitate card acquiring services and guarantee

arrangements with suppliers, and cash deposits held
infavour of aircraft owners to secure operating lease
arrangements. Since the year end, a net 10.6m
of restricted cash has been released by the
Groups bankers.
The mark-to-market valuation of derivative financial
instruments moved from an asset of 4.2m at 31 March
2013 to a liability of 7.6m, as foreign exchange rates
and fuel prices moved against Flybes portfolio of
contracts. Net negative other working capital increased
from 81.5m to 105.4m, largely due the sale of two
Q400 aircraft in May 2013 which were reported as
assets held for sale at 31 March 2013, higher current
maintenance provisions and increased current
deferred income being offset by a decrease
in trade and other payables.
The balance sheet also includes the impact of the
defined benefit pension scheme deficit of 2.5m.
At March 2013, this scheme, which is closed to future
benefit accrual, had been in surplus with no amounts
being reported in the balance sheet.
Shareholders equity increased by 146.0m to 194.1m,
driven principally by issue of new shares and the profit
generated in the period.
Covenants
The Group has certain financial performance

covenants in relation to some of its aircraft financing
agreements. These specify performance, depending
on the contractual terms, against a series of tests,
which are, performed either quarterly, half yearly
or annually. Flybe has met all the terms of the
covenants tested since the inception of the
arrangements to 31 March 2014 (see note 24
to the Consolidated Financial Statements).
Country and currency risk
Flybes UK and European businesses operate in a

global market place. Most of Flybes customers are
based in Europe, although the MRO business also has
customers in Africa and the central Asian republics.
Most of Flybes revenues are derived from UK-based
customers (about 85% of group revenue) and the
joint venture operations largely from those based
in Finland and Sweden. Aircraft are bought and sold
in US Dollars as are other key costs such as fuel and
Overview
Strategic report
aviation insurance. Airport and en route charges are

payable in a mix of Sterling and Euros and the further
development of European operations will mean greater
exposure to Euro revenues and costs. This is further
considered in the Risks and uncertainties section on
pages 34 to 37 and note 36 Financial instruments.
Going concern
Flybes business activities, together with the factors

likely to affect its future development, performance
and position, are set out in the Chairman and Chief
Executive Officers statements on pages 8 and 14.
The financial position of the Group, its cash flows and
liquidity position, and events since the balance sheet
date are described in the financial performance section
of these statements on pages 9 and 15 and in the
Financial Review on pages 21 to 33. In addition,
note 36 covers Flybes financial risk management
objectives, details of its financial instruments and
hedging activities and its exposures to credit risk
and liquidity risk.
Governance
Financial and
other information
The Directors have prepared a detailed trading budget

and cash flow forecast for a period which covers at
least 12 months after the date of approval of these
Financial Statements. Having considered the forecasts
and making other enquiries, the Directors have a
reasonable expectation that Flybe has adequate
resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the
going concern basis of accounting in preparing the
Annual Financial Statements.
Andrew Knuckey
Flybe had free cash balances of 177.9m at

31 March 2014, and has met all of its operating
lease commitments and debt repayments
as they have fallen due during the year.
Flybe faces trading risks presented by current
economic conditions in the aviation sector, particularly
in relation to passenger volumes and yields and the
associated profitability of individual routes.
The Group is exposed to uctuations in fuel prices
and foreign exchange rates. The Groups policy is to
hedge between 60% and 90% of estimated exposures
12 months in advance. As of 6 June 2014, Flybe had
purchased 72.7% of its anticipated fuel requirements
and 70.5% of its anticipated US Dollar requirements
for the following twelve months.
33
Trend key
Same
Increase
DecreaseN New
This section describes the principal risks and uncertainties which may affect Flybes business, financial results
and prospects.
Risk description
Potential impact
Inherent risk trend

(movement against
prior year)
Mitigation
(a) Safety and security

Failure to prevent
a safety or securityrelated incident
including terrorist
threat, or attacks
from either internal
or external sources or
to respond adequately
to a safety or securityrelated event.
Significant adverse
effect on Flybes
reputation, financial
results and operational
performance.
Safe and secure operation is the

key priority for all of Flybes
management and staff. Flybe operates
a strong safety management system
(see page 38) and has appropriate
systems and procedures in place,
including trained staff, to respond
effectively to any such incidents.
Adverse pressure on
revenue and load
factors, and negative
impact on Flybes
growth prospects,
financial condition and
the value of its assets,
particularly, aircraft.
Flybe monitors route performance

within its commercial teams and
adjusts flying patterns to customer
demand.
(b) Extraneous matters

Flybe is exposed to
sustained deterioration
in general economic
conditions, and
reduction in domestic
and regional air travel,
particularly in the UK.
Flybes fleet planning is designed to

provide it with the most fuel-efficient
aircraft available under a mix of
ownership and lease terms.
Reduced reliance on scheduled flying
activities through increased contract
flying activities.
Flybe operates in a
highly competitive
aviation market.
34
Adverse effect on
market share leading
to reduced revenue
and profits.
Flybe has a strong position in the

markets where it operates and extends
the reach of its brand through
franchising, joint ventures and
alliances. Processes are in place to
monitor and report on route by route
performance and competitor activity
and to react rapidly where necessary.
Overview
Strategic report
Governance
Inherent risk trend

(movement against
prior year)
Financial and
other information
Risk description
Potential impact
Regulatory changes in
the airline industry may
have an adverse impact
on an airlines costs,
operational flexibility,
marketing strategy,
business model and
ability to expand.
Adverse impact on
reputation, costs and
market share coupled
with decline in growth
opportunities.
Management engages with

Governments through direct contact
and membership of industry
organisations.
Airlines may be
adversely affected by
increases in Air
Passenger Duty in the
UK and its equivalent in
other countries, and by
any future amendment
with regard to
regulation of emissions
trading and other
environmental laws
and regulations, or
negative environmental
perception of the
airline industry.
Increased costs and

reduced demand across
the airline industry
which may result in
reduced profitability
for Flybe.
Management monitors Governments

proposals with regard to changes
in planned approach to aviation
taxation and engages with
Governments through direct contact
and membership of industry
organisations. Flybe seeks to pass
on additional duties to its passengers
through its pricing approaches.
Flybe is exposed
to the failure
or non-performance
of commercial
counterparties as well
as requiring the services
of key suppliers such
as airports, air traffic
control systems, and
fuel supply companies.
Adversely affect Flybes

results or operational
performance.
Most suppliers can be replaced

by an alternate. Contract negotiation
teams are highly experienced and
knowledgeable of the industry with
a strong track record of developing
value for Flybe.
Flybe is exposed to the

effects of extraneous
events, such as
epidemics, natural
occurrences or
disasters (eg. severe
weather or ash
cloud disruption).
Reduced demand,
market share and
revenue, any of which
may adversely affect
Flybes financial results
or operational
performance.
Flybe has procedures in place to

respond to such events, and to
communicate effectively with
passengers and other stakeholders.
Reduced demand
for aviation across
the industry.
Mitigation
Flybe continues to be compliant

with the new ETS regime.
Flybe operates fuel-efficient aircraft
for its flying pattern and seeks to
develop further fuel efficiencies
through changes in its practices.
35

Continued
Trend key
Same
Increase
Risk description
DecreaseN New
Potential impact
Inherent risk trend

(movement against
prior year)
Mitigation
(c) Reputational risk

Flybe is exposed to an
event damaging its fleet
reputation, company
reputation or brand.
Reduced demand,
market share and
revenue, any of which
may adversely affect
Flybes reputation,
financial results
or operational
performance.
Flybe has a strong culture

of safety management and a
positive business culture supported
by a code of ethics and appropriate
HR policies. Flybe has procedures
in place to respond to events with
the potential to cause damage
to its reputation or brand, and
to communicate effectively with
passengers and other stakeholders.
(d) IT Systems and the internet

Flybe is heavily
dependent on its
information technology
systems, the ongoing
development of those
systems, and the
internet to operate its
business. The incidence
of cyber-attacks has
increased worldwide
and Flybe is exposed
to this as a result of its
reliance on the internet
for a high proportion
of delivery of its sales.
Loss of systems or
connectivity to the
internet, as a result
of internal or external
threat, could lead to
disruption and lost
revenue with an adverse
impact on Flybes
financial condition.
Breaches in IT security,
or fraud, could
adversely affect Flybes
brand and reputation,
and have an adverse
impact on revenue.
Inability to implement
successful development
could lead to Flybes
business plans not
being fulfilled.
Flybe operates an
e-commerce business
and deals with a
significant amount of
personal and business
information.
36
A security breach
could lead to material
reputational damage.
A disaster recovery plan is in place

and includes moving certain
operations to other sites.
Flybe contracts with third parties
for the provision of IT services and
solutions where the service is subject
to disruption or could be lost entirely.
Where Flybe uses third parties to
supplement its own resources,
effective processes relating to
contract review, compliance and
management are in place to mitigate
the consequent risks that arise.
Flybe has robust security procedures
in place which are tested and reviewed
by independent third parties.
Flybe has robust security procedures

in place which are tested and reviewed
by independent third parties.
Overview
Risk description
Strategic report
Potential impact
Governance
Inherent risk trend

(movement against
prior year)
Financial and
other information
Mitigation
(e) Relationships with our people

results and operational
performance.
Flybe has well-developed consultation

and negotiation processes with
its employees and its unions, and
continues to ensure its employment
remuneration reflects current
market conditions and practices
that are supported by succession
planning policies.
(i) Fluctuations in fuel

prices and foreign
exchange rates.
Adverse movements
in these areas can
adversely affect both
Flybes profit and
financial position.
While hedging cannot guarantee

against significant long-term price
changes, a well-established hedging
strategy is in place that is designed
to provide certainty over a significant
proportion of Flybes cost base
in the coming 12 months
see pages 27 to 29.
(ii) Unavailability of
suitable financing.
Lack of adequate liquid

resources could result
in business disruption
and adversely affect
Flybes financial results.
Flybes policy seeks to maintain

appropriate levels of free cash
(15 weeks at 31 March 2014) which
will be available to meet costs in the
event that our normal activities are
temporarily disrupted by, for example,
severe weather, volcanic ash, extended
industrial dispute or fleet grounding.
(iii) Continuing
performance of
counter-parties.
There is a risk of
material loss in
the event of nonperformance by
these counter-parties.
Flybes policy is to invest surplus funds

and enter into hedging agreements
only with counter-parties that meet
certain credit rating criteria.
(iv) Failure to remove

grounded aircraft
costs, or have to
take delivery of new
aircraft surplus to
requirements.

financial results.
Flybe is in a number of discussions

with other airlines and lessors about
removing grounded aircraft costs, and
with aircraft manufacturers to ensure
aircraft deliveries, and types of
aircraft, match Flybes requirements.
Flybe is dependent
on good industrial
relations, across
all its regions (with
a workforce that is,
in significant part,
unionised), and is
exposed to shortages
of key personnel.
(f) Financial risks
Flybe is exposed to
risks associated with:
37
Safety
Flybe is committed to developing, implementing,

maintaining and constantly improving strategies and
processes to ensure that all our aviation activities take
place under an appropriate allocation of organisational
resources, aimed at achieving the highest level of
safety performance, while delivering our services.
Flybes Safety Policy recognises that safety is everyones
personal responsibility whether an employee, passenger,
contractor, visitor or supplier and is a primary
responsibility of all managers and employees. All levels
of management and employees are accountable for
delivery of the Groups safety performance, starting
with the Chief Executive Officer. In addition, managers
ensure that our Safety Policy is implemented and
understood by all employees and contractors.
Hazards resulting from our operations and activities are
analysed and their risk assessed in order to eliminate,
mitigate or manage the safety risks to or below
acceptable levels.
All personnel are encouraged to report any safety
issue, irrespective of the cause, in the knowledge that
Flybe operates in an open, fair and balanced way that
does not attribute blame a Just Culture.
The Flybe Safety and Security Review Committee
(SSRC), chaired by an independent Non-Executive
Director, meets quarterly and is charged with holding
the operational executive management team to
account for all safety and compliance matters,
reporting directly to the Board. The SSRC is chaired
by Alan Smith but, after his retirement in August 2014,
Timo Anderson will chair this committee.
The Flybe Safety Management System (SMS)
coordinates all safety activity across the Flybe
operation. This allows safety data derived from
both normal operations and safety events to be used
in the review of operational procedures and training.
Flybe encourages all employees to report any safety
issue, irrespective of the cause, in the knowledge
that it operates a no-blame culture, with all incidents
investigated objectively and thoroughly. The SMS
is reviewed on a monthly basis at the Safety Action
Group chaired by the Head of Safety and Compliance.
Actions from these meetings are reviewed at the
quarterly Strategic Review Board chaired by Flybes
Director of Operations, John Palmer.
38
Additional oversight is demonstrated through Flybes

membership of IATA and it has held the International
Operational Safety Audit (IOSA) accreditation since
October 2007.
Compliance monitoring (quality assurance)
The establishment and maintenance of an effective

compliance monitoring function ensures not only an
effective and efficient operation but also a safe one.
The compliance monitoring function oversees all
operational activity and consists of two teams.
The first is dedicated to the airline, covering:
>>the
Air Operators Certificate
>>Approved
>>EASA
Training Organisation; and
Part M, aircraft continuing airworthiness.
The second team is dedicated to the MRO and covers:

>>the
Part 145, for an aircraft maintenance organisation
>>Part
147, for an engineering licence type training

organisation
>>Part
21G, for a production organisation; and
>>Part
21J, for a design organisation.
Both the compliance monitoring managers have a direct

line of report to the Accountable Manager who has
overall responsibility for the safe operation of Flybes
activities under civil aviation legislation in the UK.
Health and safety
There is total commitment at Flybe to the health,

safety and well-being of its customers and employees.
The Executive Management continues to demonstrate
its commitment to health and safety through proactive
initiatives and close liaison with staff and union
representatives. The number of key managers receiving
National Examination Board in Occupational Safety
and Health (NEBOSH) accreditation has increased
though Flybe does not content itself merely with
compliance.
Health and safety is incorporated into its SMS and
overseen, ultimately, by the SSRC. Policies and
procedures are drawn up with the full involvement
of unions and Flybes HR team to ensure not
only compliance but the safest achievable
working environment.
Overview
Strategic report
Governance
Financial and
other information
2,650
Group and joint venture employees

at 31 March 2014
People engagement
Flybe is only as good as its talented team, which

endeavours to deliver an excellent service to its loyal
customers every day. During the year, the Company
has undertaken an important rightsizing programme
that will ensure its cost of employment remains
competitive. The Companys goal is to have the
right people in the right jobs and for Flybe to be
an attractive workplace in which a long-term and
challenging career can be built on equality of
opportunity. It is proud to be one of the very few
airlines that enables many of its employees to live
where they work locally, within the regions both
inthe UK and in the European business.
In 2014 Flybe is launching an employee engagement
programme called The Purple Way to align all
employees with the Companys strategy and journey
to become Europes Best Local Airline. The
engagement programme will be followed by a
customer service training programme called
Flybe Loves Service.
Launch of the Purple Way.
Values
Flybe is committed to certain core principles. These are

expressed in its People Strategy or The Way We Do
Business that includes our START values of:
>>S:
Safety no compromises
>>T:
Teamwork One Flybe: collaboration as a way

oflife
>>A:
lignment acting with urgency and embracing

A
our goals and The Purple Way
>>R:
Responsibility take accountability and ownership
>>T:
Transparency open, upfront, authentic and share
Our people
As at 31 March 2014, Flybe employed 1,960 employees

across seven regional UK bases with another 690
employed by our joint venture in Finland. Nearly 22%
of our UK employees worked part-time or flexibly
to balance their lifestyle needs and now over 75%
of its employees have more than five years service and
an average attendance rate of over 96%. Unfortunately,
the impact of the widespread restructuring programme
has led to over 1,100 employees leaving the business
including a significant change in the Flybe Leadership
Team of senior managers.
Talent development
Flybes aim is to develop and promote talent internally
and the Training Academy delivers both the Groups
capacity to provide high quality training for its own
employees and those of third parties. This state-of-theart facility has 26 classrooms, a simulator hall with
capacity for four aircraft simulators, cabin crew
simulator hulls for safety and refresher training, and an
engineering apprentice workshop. Qualifications
include a flight deck Multi-Crew Pilots Licence (under
the first CAA-approved scheme for a UK airline), cabin
crew and customer service NVQs and engineering
aircraft type approvals. Flybe already has students
engaged on the diploma in engineering, which after
four years will provide successful students with a
foundation degree level qualification, a BTEC and
diploma in engineering and a Part 66 engineering
licence. Flybe also continues to operate its Mentored
Airline Pilot Scheme that part-sponsors pilot training
through the provision of an interest-free loan as well
as maintaining its relationships with UK and European
flying schools for potential pilots.
Management development
To engage a dispersed workforce, line management
has been empowered to lead and the majority of our
people managers have completed the Flybe Leader
initiative in the UK. This is a bespoke 12-month modular
development programme that can progress to an
Institute of Leadership and Management qualification
or further to a Foundation Degree in Leadership
and Management.
Flybes Operating Board has also introduced
an annual performance management system
as well as a succession planning process as part
of its commitment to developing key talent.
39
Continued
Benefits
Flybe aims to provide fixed and variable pay and
short- and long-term benefits (including insured
benefits) that, in the round, are affordable, competitive
in its marketplace, performance-led and flexible.
UK employees have been able to participate in the
Groups Share Incentive Programme (SIP) under
which all eligible employees were awarded 100 free
shares shortly after Flybes IPO and the Groups
approved Save As You Earn Scheme (SAYE) launched
in 2011. Flybe operates a Group Personal Pension Plan
(or equivalent in relevant territories) and almost 95%
of employees have elected to participate and benefit
from employers contributions to their personal
fund. Flybe has salary sacrifice schemes to include
pensions and buying extra days off work and
child-care vouchers.
Employee satisfaction managers review results with

their teams and agree actions or areas to focus on to
improve employees experience of work. Year-on-year
improvement is sought both in terms of level of
participation and the actual results themselves.
Employee communication
In both the UK and in its joint venture, Flybe continues
to focus on active two-way communications with
its dispersed workforce through line management,
regular Your Flybe email and intranet updates,
as well as through its recognised trade union partners.
Additionally, in the UK, Flybe uses its consultative
body known as Open Channel. Open Channel meets
quarterly, is chaired by a member of the Operating
Board and is attended by up to 25 elected
representatives.
>>Harassment
Flybe has an ongoing employee engagement

programme The Purple Way. The purpose is to share
the Groups vision and strategy with all employees
through a series of connection workshops and
emotionally engage them on the journey the
Company is on.
Flybe also utilises surveys to seek feedback from staff.
The first of these was initiated in Spring 2014 and the
results will be available later in the year.
Safety Culture Diagnostic facilitated by external
consultants and aimed at improving safety awareness
for all employees. The diagnostic consists of an online
survey, focus groups and individual interviews and
results in a structured risk-based action plan.
40
Human rights
Flybe operates entirely with staff employed in the EU
and consequently has not developed a separate, all
encompassing human rights policy. Detailed policies
and procedures exist, among others, around:
>>Equality
and diversity see below
>>Grievances
>>Disciplinary
procedures
>>Whistle-blowing
and bullying
>>Bribery.
In addition, Flybe uses its relationship with its

employees to raise, air and resolve issues, whether
this is through Open Channel or its established
trade unions.
Equality and diversity
Equality of opportunity and valuing diversity are
central to the regional activities of Flybe and it aims
to ensure that all employment decisions are based
on fairness and merit.
Applications for employment by an individual from any
background, including disabled persons, are always
fully considered, bearing in mind the aptitudes of the
applicant concerned. In the event of members of staff
becoming disabled, every effort is made to ensure that
their employment with the Group continues and that
appropriate training, career development and
promotion of disabled persons should, as far as
possible, be identical to that of other employees.
Strategic report
Overview
Governance
Financial and
other information
The breakdown of employees by gender is as follows:

31 March 2014
Male
Board
Senior management (Flybe Leadership Team)
All other employees of the Group
Employees of Flybe Finland
31 March 2013
Female
Male
Female
No.
No.
No.
No.
6
32
1,117
388
1,543
100
80
58
56
58
8
797
302
1,107
0
20
42
44
42
9
35
1,562
422
2,028
90
85
58
61
59
1
6
1,151
265
1,423
10
15
42
39
41
Community and charitable activities
Environment
Flybe has sponsored a number of local community

events and activities. These include:
Flybe supports the view that human activity, including

air travel, is contributing to global climate change.
Although aviation accounts for around 2% of global
CO2 emissions, Flybe is committed to being an industry
leader in minimising its environmental impact wherever
possible while continuing to provide vital air services
to our passengers.
Flybe undertakes a number of community and

charitable activities. These are focused on supporting
the local communities where the Company is based,
as well as harnessing the fundraising power
of employees and customers.
>>Shirt
sponsor, Exeter City FC
>>Sponsorship,
Exeter Chiefs Rugby Club
>>Sponsorship,
Newquay AFC
>>Jersey
Rugby Football Club, help with

complimentary flights
Flybes partnership with Cancer Research UK

celebrated its fifth anniversary, since launching the
partnership the airline has raised over 486,000.
In its first ten years of operations, Flybe has

made it a centrepiece of its commitment to
environmental sustainability to operate one of the most
environmentally sensitive fleets in aviation our goal of
reducing both noise and emissions remains consistent.
In this respect, Flybes policy continues to be to:

>>Commit
to a system for managing its environmental

impact in order to comply with all applicable current
legislation and, where practical, seek to meet future
legislative requirements ahead of relevant deadlines
>>Implement
a training programme for staff to enhance

environmental awareness, constantly informing
and motivating colleagues, to enlist their support
in improving Flybes performance
>>Integrate
the Companys environmental objectives

into business decisions, where feasible, in a costefficient manner
>>Develop
appropriate emergency response plans

for major incidents in order to minimise their
environmental impact
>>Encourage
the adoption of similar principles

by its suppliers.
41
Continued
Waste and energy management remains a key focus

area for Flybe. Recycling policies are already in place
at all major premises and sustainability has become
a key focus area for its procurement.
Management of buildings has incorporated, wherever
possible, the latest environmentally-friendly techniques.
Aircraft impact upon the environment in two key areas:
locally to airports and over the course of a journey.
In 2007, Flybe introduced an Ecolabel rating for its
aircraft which has been designed to provide customers
with a range of information regarding the noise and
carbon emissions for each flight. The label identifies
the noise rating and also the emissions made during
the normal take-off and landing cycle of a flight and
also the carbon emissions for the total flight based
on a range of distances.
Fuel usage and emissions
Each Bombardier Q400 aircraft produces 30% to 40%

lower emissions on routes where it has replaced similar
capacity, older generation aircraft or 50-seat jets. This
equates to 6,000 to 8,000 fewer tonnes of CO2 in the
air every year for each Q400. Over the course of last
two years, the introduction of E175 jets is proving
successful with early indications showing significant
improvement on fuel burn to the manufacturers
published data. Future developments include
aerodynamic packages that are being developed to
generate further improvements in fuel consumption,
carbon emissions and noise profile.
While CO2 emissions are identified as the primary
contributor to global warming, other pollutants are
also harmful to the environment and have dedicated
limitations regulated by the International Civil Aviation
Organisation (ICAO). The Embraer E-series jets
in Flybes service produce certified emissions
significantly lower than the more stringent CAEP/6
regulations set by ICAOs Committee on Aviation
Environmental Protection.
42
The airlines Flight Efficiency Programme, introduced

in 2009 has resulted in a 13.4% reduction over the
average in-flight fuel burn before the programme
was launched. The programme relies on finely tuned
strategies to reduce fuel consumption. These include
lowering the aircrafts maximum operational cruise
speed by an average of 20 knots and optimising
performance during each phase of flight (climb profile,
approach from cruise altitude, low speed decent and
APU use). There are also complex tankering strategies
for refueling from the lowest cost vendor.
While the programme sets the parameters, the minuteto-minute decisions made by Flybes flight crews are
what makes a real difference. These decisions are
based on the dynamic fuel efficiency reports, which
evaluate each crews performance in flight. The Flight
Efficiency Programme is part of a toolbox of different
items crews can use to assess costs in a dynamic
operating environment.
A further development over the last twelve months has
been that of the use of single engine taxi-ing on the
Q400 fleet.
Similar measures have been introduced to the Embraer
fleets this year and further CO2 savings are anticipated.
Emissions Trading Scheme (ETS)
Since the introduction of aviation into the European

ETS on 1 January 2012, Flybe have complied fully
with the requirements of the scheme to submit an
independently verified report of its CO2 emissions
and purchase equivalent carbon allowances under
the scheme to offset its carbon footprint.
The amount of CO2 emitted by the Company is
predominantly driven by its flying activities and,
as fuel is a significant proportion of Flybes operating
expenditure, it is heavily incentivised to reduce fuel
usage and hence its CO2 emissions. While step changes
in lower CO2 emissions require both major advances in
technologies associated with next-generation aircraft
and a substantial global investment in the production
and supply of biofuels, there exist a number of
opportunities for the Company to reduce its CO2
Overview
Strategic report
Governance
Financial and
other information
15.7kg
Flybe UK fuel burn per seat
(2007/08: 19.1 kg)
emissions in the medium-term. For example, Flybe

pilots are trained in economic flying techniques
that involve:
Greenhouse gas emissions data for 2013/14
>>Seeking
Scope 1
Aviation fuel
Other fuels
Total Scope 1
direct routings between the departure

airport and the arrival airport
>>Flying
at speeds that are economical for the engines

performance
>>Planning
descents into airports, with air traffic

control assistance, that allow for the most fuelefficient approach.
Flybe supports initiatives which provide for an

international framework for governing aviation
emissions so long as this is consistent with, and not
supplementary to, the European ETS. It remains
concerned about the imposition of specific aviation
taxes, some of which purport to be linked to
environmental objectives. Flybe has campaigned
for some time for the reform of UK Air Passenger
Duty and for the per passenger tax to be replaced
with a per plane tax which is linked to the emissions
of the aircraft and their deployment.
Greenhouse Gas (GHG) Emissions Report
The Directors of Flybe Group plc present the

greenhouse gas emissions report for the Group
for the year ended 31 March 2014. Flybes GHG
emissions data is intended to comply with the
reporting requirements of the Climate Change Act
2008. Emissions include all data reported from its sole
operating subsidiary, Flybe Limited and 60% of data
reported by our joint venture partner, Flybe Finland,
using the financial control approach.
The information presented follows the 2013 UK
Government environmental reporting guidance.
The Group has also adopted the GHG Protocol Value
Chain (Scope 3) Standard, but Flybe is not as yet
able to report on all categories that may be relevant.
The figures relate to the required elements of each
scope 3 category and some of the optional elements.
2013 UK Governments Conversion Factors for
Company Reporting were used in converting
activity data into carbon emissions.
2013/141
tCO 2 e2
Scope 2
Electricity UK
Electricity overseas
Total Scope 2
738,236
712
738,948
2,241
203
2,444
Scope 3
Water supply and waste disposal
Business travel air/car
Total Scope 3
Gross and net emissions
18
492
510
741,902
Base year not provided as 2013/14 will be the first year of data
collection and will therefore become the base year.
2
tCO 2 e is the number of tonnes of carbon dioxide equivalent and
is the universal unit of measurement to indicate the global warming
potential (GWP) of each of the six greenhouse gases, expressed
in terms of the GWP of one unit of CO 2 .
Specific exclusions:
>>Emissions
from air conditioning and refrigeration

units in office buildings excluded due to unavailable
data. These are estimated to account for less than
0.5% of total of Scope 1 emissions
>>Emissions
from taxi, bus and rail business travel

are excluded due to unavailable data. These are
estimated to account for less that 0.5% of total
of Scope 3 emissions.
43
Continued
Intensity measurements
The Groups carbon emissions are principally made

up of emissions from flying activities. In order
to allow comparison between its peers, the
chosen measurement is emissions per passenger
kilometre flown.
For 2013/14, which will be the starting base for future
comparison, the Groups total emissions per passenger
kilometre were 147.3 g/km.
Base year
Flybe intends to have a fixed base year of 2013/14.

This year has been chosen as this is the first year for
which Flybe has reliable data and is typical in respect
of its operations. The Groups policy on base year
recalculation is to recalculate the base year and the
prior year emissions for relevant significant changes
which meet its significance threshold of 5% of base
year emissions.
Rainwater harvesting
Flybes state-ofthe-art training academy, based in

Exeter, has a rainwater harvesting system for re-use
within that building.
Noise
The Q400 is rightfully heralded as one of the quietest

passenger turboprop aircraft in the world. Inside the
Q400, the revolutionary Active Noise and Vibration
Suppression system significantly reduces noise and
vibration, making it as quiet and comfortable as a jet.
Outside, it is considerably quieter than jets with a
similar number of seats (10 Decibels of Exterior
Perceived Noise quieter).
Flybes commitment to reducing the impact to local
communities is demonstrated by its latest E-series
order. Working closely with the manufacturer, Embraer,
Flybe developed a noise reduction kit that has been
fitted to all of Flybes E175 aircraft in order to reduce
further the effect of noise on the local environment.
44
Approval of Strategic Report
The report was approved by the Board of Directors

on10 June 2014 and signed on its behalf by:
Andrew Knuckey
Chief Financial Officer and Company Secretary
Overview
Strategic report
Governance
Financial and
other information
Chairmans statement on corporate governance
This years Annual Report also contains, for the

first time, the full implementation of the new
requirements on remuneration reporting. This now
includes a binding shareholder vote on remuneration
policy in addition to a vote to adopt the Remuneration
Report (as set out on pages 66 to 83 of this report).
The Board is very sensitive that its prime objective in
setting out its remuneration policy is to promote the
success of the Company in line with the strategy and
the risk profile agreed by the Board. It must, however,
do so with the approval of its shareholders, who
are the prime beneficiaries of such a strategy.
The Board has engaged widely with

shareholders during the year, not least
during the capital raise, and we are
delighted to welcome so many new
shareholders to our register during
the year.
Simon Laffin
Dear shareholder
Flybe is committed to the highest standards
of corporate governance, and will endeavour to
continue to meet these standards at all times. We
believe in living these standards, not just in conforming
to rules and regulations by ticking boxes. Excellent
corporate governance is however not an end in itself.
It is a means to the end of achieving a high performing
company that delivers value to its stakeholders,
while taking account of its responsibilities
to the wider community.
The regulatory and reporting landscape for UK listed
companies continued to evolve during 2013, with the
introduction of the Strategic Report, new requirements
to report on greenhouse gas emissions, and a new
formal requirement on the Board to ensure that
the Annual Report presents a fair, balanced and
understandable assessment of the Companys financial
position and future prospects. We have planned
carefully to comply as closely as possible with these
new requirements, together with the enhanced
disclosures required by the Audit Committee, although
we recognise that best practice will evolve as
companies gain experience with the new regulations
and feedback is received from both investors
and regulators.
The Board has reviewed its own structure and believes

that a small well-balanced board, with a majority
of committed, diverse, informed and energetic
Non-Executive Directors continues to be an important
part of our corporate governance. Building on the
considerable change over the last 12 months, the
Board will continue to develop further along these
lines over the next year.
Although not required to do so under the UK
Corporate Governance Code, all Directors will
nevertheless submit themselves for re-election
at the 2014 Annual General Meeting (the AGM).
The Board has engaged widely with shareholders
during the year, not least during the capital raise,
and we are delighted to welcome so many new
shareholders to our register during the year. Effective
communication with shareholders is a key strategic
priority and over 50 meetings have been held with
investors during the year. All shareholders are
encouraged to attend the AGM in July where the
Directors and executive team will be available to
meet shareholders directly and to discuss any matters
of importance to them. Additional materials such
as annual and interim reports, results and other
announcements are available via Flybes website
at www.flybe.com/en/corporate/investors.
Simon Laffin
45
Board of Directors
With the exceptions as noted

below, all of the other Directors,
Company Secretary and Operating
Board identified served throughout
the year.
Executive Directors
Saad Hammad
Chief Executive Officer (aged 51)
appointed 1 August 2013
Saad Hammad joined Flybe as
Chief Executive Officer on 1 August
2013. He has considerable airline
experience having been Chief
Commercial Officer of easyJet plc
from 2005 to 2009. Mr Hammad
was a Non-Executive Director of
Air Berlin plc and as of 25 April
2014, is a Non-Executive Director
of Pegasus, the leading Turkish
low-cost carrier. He has also held
senior executive roles at a number
of leading corporations, including
The Gores Group, Procter
& Gamble, Thorn-EMI, Vision
Express and Tibbett & Britten.
Mr Hammad is a member of the
Nominations Committee.
Andrew Knuckey
Chief Financial Officer and
Company Secretary (aged 53)
Andrew Knuckey joined Flybe
in 2005, having previously had
a 24 year career with KPMG LLP,
latterly as a partner in audit and
transaction services. MrKnuckey
played a key role in the successful
acquisition and integration of BA
Connect, following which he was
appointed as Chief Financial
Officer at Flybe in April 2007.
As Chief Financial Officer, he
helped deliver the IPO on the
London Stock Exchange in 2010
and, more recently, the design
and implementation of Flybes
Turnaround Plan. He also chairs
our joint venture with Finnair.
MrKnuckey will leave the Board
in August 2014 after expiry of his
12 month notice period, and will
be replaced by Philip de Klerk.
46
Independent
Non-Executive Directors
Simon Laffin
Independent Non-Executive
Chairman (aged 55)
appointed 4 November 2013
Simon Laffin was appointed
to the Flybe board as Independent
Non-Executive Chairman in
November 2013. MrLaffin is
Chairman of Assura Group Limited,
Chairman of the Audit Committee
at Quintain Estates & Development
PLC and an adviser to Dentsu Inc.
Previously he was Group Finance
and Property Director at Safeway
plc between 1994 and 2004 and
has served as a Non-Executive
Director at Aegis Group Plc,
Mitchells & Butlers plc and Northern
Rock plc (as part of the rescue
team), an adviser to CVC Capital
Partners, and Chairman of Hozelock
Group. MrLaffin chairs Flybes
Nominations Committee
and sits on the Audit and
Remuneration Committees.
Charlie Scott
Deputy Chairman and Senior
Director (aged 65)
Charlie Scott was formerly
Chairman of William Hill plc from
2004 until 2010. He is a chartered
accountant and was previously
Chief Executive Officer at Saatchi
& Saatchi plc and Chairman of
Cordiant plc. MrScott has held
other non-executive positions,
including with airport group
TBI plc. MrScott chairs Flybes
Audit Committee and sits
on the Nominations and
Remuneration Committees.
Overview
Strategic report
Governance
Alan Smith
Director (aged 67)
Alan Smith is currently Chairman
of Fisher Leisure Holdings Limited.
His career has included being
Managing Director of Superdrug
Stores plc, B&Q plc and The
Victoria Wine Company Limited
before working for the Boddington
Group Limited as Group Managing
Director. In 1996, Mr Smith moved
to Evans Halshaw Holdings plc as
Group Chief Executive before
becoming Chief Executive of
Somerfield plc from 2000 until
2002. Mr Smith chairs Flybes
Safety and Security Review
Committee and sits on the Audit,
Nominations and Remuneration
Committees. Mr Smith will retire
from the Board on 31 August 2014.
David Longbottom
Director (aged 69)
David Longbottom is currently
Pro-chancellor and Chairman
of the Board of Governors of
London South Bank University.
MrLongbottom was formerly
Chairman of executive search firm,
Horton International (UK) Limited,
the Senior Independent Director
of Luminar Leisure plc and a
director of DSG International plc
where he held a number of senior
positions within the Dixons Group
plc after joining in 1987 (including
Group Human Resources Director).
Previously, Mr Longbottom
worked with British Gas plc,
Courtaulds plc and Lloyds
of London. MrLongbottom
chairs Flybes Remuneration
Committee and sits on the
Nominations Committee.
Financial and
other information
Sir Timothy Anderson

Director (aged 57)
Sir Timo Anderson was appointed
to the Board as Non-Executive
Director with effect from 1 May
2014. Sir Timo established the
UK Military Aviation Authority
(the body responsible for military
aviation regulation and safety),
becoming its first Director General
from 2010 to 2013. Prior to that
Sir Timo was Assistant Chief of
Air Staff, Royal Air Force. He served
in the Royal Air Force from 1979
going on to hold senior command
appointments. Sir Timo has joined
the Safety and Security Review
Committee, and will chair that
committee following MrSmiths
retirement from the Board.
He has also joined the
Nomination, Remuneration
and Audit Committees.
47
Board of Directors
Continued
Other Executive and

who served but resigned
during the period are:
>>Anita
Lovell, Non-Executive
Director resigned 17 May 2013
>>Peter
Smith, Independent
Non-Executive Director
resigned 8 July 2013
>>Jim
French, Chairman and

resigned as Chief Executive
Officer on 1 August 2013 and
Chairman on 4 November 2013
>>Mark
Chown, Director
of Corporate Strategy
resigned 4 August 2013
>>Mike
Rutter, Managing Director

of Flybe Outsourcing Solutions
>>Andrew
Strong, Managing
Director of Flybe UK
Philip de Klerk will join Flybe as

Chief Financial Officer in August
2014. Mrde Klerk will join Flybe
from SABMiller, where he was
Global Head of Financial Planning &
Analysis and Finance Director of the
Business Capabilities Programme.
Prior to this, he was Chief Financial
Officer of Ineos Olefins & Polymers
Europe and spent 16 years at
Unilever in a variety of roles.
Company Secretary
Andrew Knuckey, Chief

Financial Officer, has taken
on the responsibilities of this role
after Chris Simpson resigned
on 7 March 2014. He will hand on
this role to Annelie Carver who joins
Flybe as Company Secretary and
General Counsel on 23 June 2014
from Michelmores Solicitors,
where she was a partner in their
corporate and commercial team.
48
Operating Board
The Board is supported in its dayto-day running of the Group by the

Operating Board, which comprises
(in addition to Messrs Hammad and
Knuckey) the following members,
together with dates appointed
to the Operating Board if during
2013/14:
Paul Simmons
Chief Commercial Officer
(aged 49) appointed
28 October 2013
Paul Simmons joined Flybe in
October 2013 from easyJet where,
for the last five years, he led their
team in the UK as Director, UK
Market. Prior to easyJet,
MrSimmons held senior
commercial positions at Oberoi
Hotels Group (EVP Sales &
Marketing) and IHG (Global VP,
InterContinental Brand) and a
variety of marketing roles at Procter
& Gamble, S.C. Johnson, Helene
Curtis/Unilever and Kelloggs.
John Palmer
Director of Operations (aged 52)
appointed 17 September 2013
John Palmer joined Flybe in 2006
as Director of Aviation Services and
previously held senior management
roles in British Airways, Virgin
Atlantic and Zurich Financial
Services. He was promoted
to Director of Airline Operations
and Deputy COO in 2009 before
becoming, in 2011, Managing
Director, Flybe Aviation Support.
Appointed as Director of
Operations in August 2013,
MrPalmer is now responsible for all
aspects of the Flybes operations,
including Flybe Finland Oy, and
is a member of the Safety and
Security Review Committee.
Simon Charles
Director of Human Resources and
Health and Safety (aged 47)
Simon Charles joined Flybe in
January 2007 from RHM Plc
where he was Group Director
of Organisation and People
Development and part of the
management team involved in the
initial public offering of shares
in RHM plc. He has spent 25 years in
human resources within significant
companies having been European
HR Director at Quaker Inc. and held
management positions with
PricewaterhouseCoopers, Pepsico
Inc. and Unilever plc. MrCharles
is a member of the Safety and
Security Review Committee.
Matt Bennett
Director of Internal Audit, Risk
and Special Projects (aged 38)
appointed 10 October 2013
Matt Bennett, a Chartered
Accountant, joined Flybe
in January 2012, as the Director
of Internal Audit, Risk and Special
Projects to set up the Companys
first Internal Audit function.
MrBennett has commercial
auditing experience having led the
audit function for four years at the
Rank Group PLC, and more recently
for six years in a joint Director of
Financial Control and Audit role for
Sony Computer Entertainment
(Sony PlayStation). MrBennett
reports to the Chief Executive
Officer and the Audit Committee.
Matt Linsey
Acting Director of Information
Technology (aged 38)
appointed 25 October 2013
Matt Linsey joined Flybe in
December 2003 as a Systems
Architect to direct the design
activities of Flybes IT department.
MrLinsey brings 14 years
experience of IT previously
contracting in various sectors
including military, education and
e-commerce. He was promoted to
Head of IT Services in 2006 and
then to Head of IT Development
in 2008 before being made Acting
Director of IT in October 2013 to
oversee all IT delivery and
operations for Flybe.
Overview
Governance
Strategic report
Financial and
other information
Group Board
Audit Committee
Nomination
Committee
Remuneration
Committee
Safety & Security

Review Committee
Charlie Scott
(Chair)
Simon Laffin
(Chair)
David Longbottom
(Chair)
Alan Smith
(Chair)
Timo Anderson
Timo Anderson
Timo Anderson
Timo Anderson
Simon Laffin
Saad Hammad
Simon Laffin
Simon Charles
Alan Smith
David Longbottom
Charlie Scott
John Palmer
Charlie Scott
Alan Smith
Alan Smith
This report sets out how the Company applied the

principles of the UK Corporate Governance Code
issued by the Financial Reporting Council in September
2012 (the Code) in the year to 31 March 2014. A copy
of the Code can be found at www.frc.org.uk/
corporate/ukcgcode. The Financial Conduct
Authoritys Listing Rules require the Company to
set out how it has applied the main principles of the
Code and to explain any non-compliance.
Statement of compliance
The Board is committed to maintaining high standards

of corporate governance and has fully considered the
provisions of the Code. The Board considers that the
Company is a smaller company for the purposes
of the Code which defines this as a company which
has been below the FTSE350 throughout the year
immediately prior to the reporting year. Throughout
the year ended 31 March 2014, and up to the date of
approval of this Annual Report, the Board considers
that it and the Company have complied with the best
practice provisions set out in the Code as it applies to
smaller companies, with the following exception in
place until 4 November 2013:
>>The
Code recommends that the roles of Chairman

and Chief Executive Officer should be separated and
clearly defined. Jim French served as both Chairman
and Chief Executive Officer of the Group until the
appointment of Saad Hammad as Chief Executive
Officer on 1 August 2013. Jim French stepped down
as Chairman on the appointment of Simon Laffin
on 4 November 2013.
The following paragraphs explain how the Company

has applied the principles of good governance
and the code of best practice set out in the Code.
49
Continued
The Board
Structure and leadership

At 31 March 2014 the Board comprised six
Directors, of whom four are Non-Executive
and two are Executive.
Executive Directors
Saad Hammad
Andrew Knuckey
Simon Laffin
Independent Non-Executive Chairman
Charlie Scott
Deputy Chairman and Senior
Director
Alan Smith
Director
The Board
David Longbottom
considered
Director
The Board is led by the Chairman, Simon Laffin,

who is responsible for ensuring its effectiveness
in all aspects of its role. The Boards key purpose
is to provide the entrepreneurial leadership and vision
necessary to ensure the Companys prosperity by
collectively directing the Companys affairs while
meeting the appropriate interests of its shareholders
and stakeholders. In addition to business and
financial issues, the Board of Directors must deal
with challenges and issues relating to corporate
governance, corporate social responsibility and
corporate ethics. It has the ultimate responsibility for
setting the Companys overall strategy and long-term
direction and provides entrepreneurial leadership
within a framework of effective controls which permit
risk to be assessed and managed. The Board has
responsibility for approving the Financial Statements,
significant acquisitions and disposals, major nonrecurring projects and major capital expenditures.
oard composition
B
and membership
Committee
performance
and membership
Risk management
Engagement with
investors
onthly results
M
Budgets and
forecasts
Annual and half
year results
announcements
Financial
performance
Governance
Day-to-day
activities
Cash
position
Cost control
Capex
Resource allocation
Organisation
structure
50
atwick slot
G
disposal
Equity fund raising
Short-term cash
forecasts
Overview
Strategic report
The Directors biographies appear on pages 46

and 47 illustrate the range of experience which ensures
an effective Board to lead and control the Group.
Further details of changes to the membership of the
Board are given on page 48. The size of the Board
represents an appropriate combination of executive
and non-executive directors for the size of the business
and allows individuals to communicate openly and
freely and to contribute through the exercise of their
personal skills and experience. The Directors have
a complementary range of financial, commercial,
operational and entrepreneurial experience which,
in the opinion of the Board, provides it and its
committees with the necessary balance of skills,
diversity, independence and knowledge of the
Group to enable them to discharge their respective
duties and responsibilities effectively.
The Non-Executive Directors have been appointed
on merit and for their specific areas of expertise
and knowledge. Their wide-ranging experience and
backgrounds ensure that they are able to challenge
and debate matters constructively both in relation to
development of strategy and performance against
objectives set by the Board.
The Company has governance procedures in place to
ensure that, on resignation, concerns, if any, raised by
an outgoing non-executive director are circulated by
the Chairman to the remaining members of the Board.
None of the Directors who resigned during the year
have raised concerns.
Key activities of the Board
Aside from day-to-day management issues,

the Board has focused on turning around the
financial performance of the business, focussing
on the Phases 1 and 2 of the Turnaround Plan and the
Immediate Actions initiated by Saad Hammad when
he joined as Chief Executive Officer in August 2013.
Although there has been a substantial impact on our
workforce, these vital actions have had the desired
effect with 47m of cumulative cost savings achieved
in 2013/14. We are on track to increase this to the
71m target annual savings for 2014/15.
Governance
Financial and
other information
Operation of the Board
In carrying out its work, the Board focuses on key

tasks, which include receiving reports on safety,
security and health, business risks, long-term strategy,
the Groups trading performance, the work of its
Committees and the actions of the Operating Board
and senior management. The Board delegates specific
responsibilities, with written terms of reference,
to its Committees details of which appear below.
The Executive Directors of the Company may attend
meetings of the Committees at the invitation of the
respective Chairmen.
The Executive Directors review and discuss with the
Board all strategic projects and all material matters
currently or prospectively affecting the Group and its
performance. The Board delegates its authority for
executive management to the Chief Executive Officer,
who leads the Operating Board, subject to monitoring
by the Board and those items referred to above.
To enable the Board to function effectively, and to
assist the Directors to discharge their responsibilities,
a comprehensive set of papers is provided in advance
of each Board and Committee meeting. These include
regular business progress reports, budgets, financial
statements and shareholder information. The Company
Secretary manages the provision of information to the
Board in consultation with the Chairman.
The Board held ten scheduled meetings during the
year. In addition the Board met on several occasions on
an ad hoc basis to deal with urgent business, including
the consideration and approval of transactions where
a decision was required before the next meeting.
The Senior Independent Non-Executive Director and
the Non-Executive Directors have met without the
Chairman and Executive Directors being present.
The Board requires all directors to devote sufficient
time to their duties and to use their best endeavours
to attend meetings. The table below details the
Directors attendance at the scheduled Board and
Committee meetings during the year.
In addition, the Board oversaw the successful equity

fund raise in March 2014, which saw the Group raise
net proceeds of 150.1m at a share price only 7.2%
lower than the previous closing price, and also saw the
introduction of several new institutional shareholders.
As a result, Flybes free float at 31 March 2014 was
95.0%, compared with 37.4% at March 2013.
51
Continued
Directors in office as at 31 March 2014
Year ended 31 March 2014

Executive Director
Saad Hammad
Andrew Knuckey
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Safety &
Security
Review
Committee
6/6
10/10
n/a
n/a
1/1
n/a
n/a
n/a
n/a
n/a
Simon Laffin
David Longbottom
Charlie Scott
Alan Smith
3/3
10/10
10/10
10/10
1/1
n/a
6/6
6/6
1/1
5/5
5/5
5/5
2/2
6/6
6/6
6/6
n/a
n/a
n/a
4/4
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
Safety &
Security
Review
Committee
6/7
4/4
4/4
3/4
n/a
n/a
n/a
n/a
2/4
1/2
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2/2
0/2
4/4
n/a
n/a
n/a
n/a
n/a
1/1
n/a
2/2
Former Directors who served during the year

Executive Director
Jim French
Mark Chown
Mike Rutter
Andrew Strong
Anita Lovell
Peter Smith
Independence
we have a Board with the optimum combination of

skills and experience needed to support the business.
As a result no targets have been established for the
composition of the Board, whether in terms of racial
background or gender.
Each of the Non-Executive Directors (other than Anita

Lovell, who represented Rosedale) who served during
the year have been identified as independent on the
basis of the criteria specified in paragraph A.3.1
of the Code and, generally, are free from any business
or other relationship which could materially interfere
with the exercise of their independent judgement.
Overall information on the gender diversity

of the Board and the Group as a whole is given
on pages 40 and 41.
The Board considers each of its Non-Executive

Directors to be independent in character and
judgement and no one individual, or group of
individuals, dominates the Boards decision making.
Diversity
All recruitment for the Board is led by the Nomination

Committee. We recognise that diversity, in its widest
sense, is important for the Boards effectiveness.
However the Non-Executive Directors have been
appointed on merit alone and specifically for their
contributions from their knowledge and experience.
Their wide-ranging experience and backgrounds
ensure that we can debate matters in relation to both
the development of strategy and performance against
the objectives set by the Board. We believe that the
diverse backgrounds of the individual Directors ensure
52
Conflicts of interest
In accordance with the Companies Act 2006, the

Companys Articles of Association permit the Board
to consider and, if thought fit, to authorise actual
or potential conflicts of interest which may arise and
to impose such limits or conditions as it thinks fit.
The Board has established a formal procedure
whereby actual and potential conflicts of interest can
be recorded by each Director and authorised by the
Board. The decision to authorise a conflict can only
be made by non-conflicted Directors (those who
have no interest in the matter being considered)
and in making such a decision the Directors must
act in a way they consider in good faith will be most
likely to promote the Companys success.
Overview
Strategic report
Directors indemnity and insurance cover
In accordance with the Companys Articles of

Association, throughout the year the Directors have
been, and continue to be, indemnified to the fullest
extent permitted by law. Appropriate Directors and
Officers liability insurance cover is arranged and
maintained via the Companys insurance brokers,
Willis, and its terms are reviewed annually.
Matters reserved for the Board
The Board has approved a schedule of matters

reserved for decision by it. This schedule is available
for inspection at the Companys registered office
and on the Companys website at www.flybe.com/en/
corporate/governance. The matters reserved for
specific approval by the Board can be subdivided into
a number of key areas including but not limited to:
>>reviewing
the Groups overall safety and

security arrangements
>>approving
the Groups long-term objectives

and strategy
>>approving
the Groups annual operating and capital

expenditure budget
>>Group
financial reporting and controls including the

approval of interim and final financial statements,
interim management statements and dividends
>>ensuring
a sound system of internal controls

and risk management
>>decisions
relating to acquisitions, disposals

and major items of capital expenditure
>>Board
and Committee membership and

succession planning
>>remuneration
>>corporate
governance matters
>>approving
certain of the Groups policies
Matters requiring Board approval are generally the

subject of a proposal by the Executive Directors
submitted to the Board, together with supporting
information, as part of the Board, or Committee,
papers circulated prior to the relevant meeting.
Governance
Financial and
other information
Board performance and evaluation
The Board has considered and supports the Codes

provisions on Board performance evaluation. It has
discussed its own performance, but decided that given
the degree of change at Board level in the last year,
there would be little value in a more formal selfevaluation process at this stage. The Non-Executive
Directors meet regularly without the Executive
Directors present, and have also met without the
Chairman in order to evaluate his performance.
Induction and continuing development

ofDirectors
All new Directors receive a tailored induction on joining

the Board, including meetings with senior management
and advisers and visits to major operating bases and
locations. The Chairman and Chief Executive Officer
are responsible for reviewing the development needs
of individual directors. All the Non-Executive Directors
have, during the course of the year, attended briefings
and seminars relevant to their role, including updates
on best practice in audit and remuneration issues
and economic affairs in general, as well as bringing
knowledge and information gathered from their
other business interests.
All Directors have access to the advice and services
of the Company Secretary who is responsible to the
Chairman on matters of corporate governance and
provides the Board with regular updates on relevant
legislation, regulations and governance best practice.
The Directors may, at the Companys expense, take
independent professional advice where necessary
and appropriate to do so.
Directors election and re-election
All directors will retire at the forthcoming AGM and,

being eligible, will offer themselves for re-election.
A biography for each of these directors, together with
a description of the skills and experience they possess
that the Company considers relevant, will be included
in the proposals put to shareholders at the 2014 AGM.
None of the Non-Executive Directors has served more
than nine years in office.
Any changes to the commitments of any Director are
always considered by the Board to ensure they will
continue to have sufficient time to enable them to fulfil
their duties with the Company. The Board is satisfied
that all of the Directors continue to perform effectively
and demonstrate commitment to their roles, including
commitment of time for Board and Committee
meetings and any other duties which may be
undertaken by them from time to time.
53
Continued
Group Board
(chaired by Simon Laffin)
Operating Board
(chaired by Saad Hammad)
Commercial
Operations
Finance
HR and
Health
& Safety
Paul
Simmons
John
Palmer
Andrew
Knuckey
Simon
Charles
Operational management of the Group
Beneath the Board there is in place a clear and

appropriate apportionment of responsibilities amongst
the senior managers designed to ensure that the
business can be managed and monitored effectively.
Senior managers report to the Operating Board which
in turn reports to the Board. The Operating Board
is led by the Chief Executive Officer and comprises
the Executive Directors together with the Chief
Commercial Officer, Director of Operations, Director
of Human Resources and Health and Safety, Director
of Internal Audit, Risk and Special Projects and the
Acting Head of Information Technology. It has
responsibility for implementing on a day to day basis
the strategy that has been agreed by the Board.
Operating Board members report regularly to the
Board on key issues.
Board committees
In accordance with the principles laid down in the

Code, the Board has established a committee structure
to assist in the discharge of its responsibilities. Details
of each of the Audit, Mergers and Acquisitions,
Nomination, Remuneration, and Safety and Security
Review Committees, and the members, roles and
activities thereof are detailed below. The Mergers and
Acquisition Committee was disbanded during the year
and its responsibilities passed back to the Audit
Committee and the Board. Each Committee reports to,
and has terms of reference approved by, the Board
which are available for review on Flybes website at
www.flybe.com/en/corporate/governance or on
54
IT
Internal
Audit, Risk
and Special
projects
Matt
Linsey
Matt
Bennett
request from the Company Secretary. The minutes of

the meetings of the Committees, where appropriate,
are circulated to, and reviewed by, the Board.
Biographies of each Board member are set out
on pages 46 and 47.
Audit Committee
The role of the Audit Committee is to provide formal
and transparent arrangements for considering how
to apply the financial reporting, risk management
and internal control principles set out in the Code,
and to maintain an appropriate relationship with
the Companys auditor.
Members of the Audit Committee can, where they
judge it necessary to discharge their responsibilities,
obtain independent professional advice at the
Companys expense.
Charlie Scott, a Chartered Accountant, has chaired the
Audit Committee throughout the year and the Board
considers that he has the appropriate recent and
relevant experience to enable him to fulfil this role.
In addition, both Simon Laffin, who was appointed
during the year and is also a qualified accountant
and Alan Smith serve on the Audit Committee. The Code
permits smaller companies to have an Audit Committee
comprising a minimum of two independent NonExecutive Directors and the Board is satisfied that Flybe
is a smaller company for this purpose. The Board is
satisfied that the members of the Audit Committee are
those who are best able to contribute to its objectives.
Overview
Strategic report
The Company Secretary acts as secretary to the

Audit Committee.
Further details about the Audit Committee can
be found on pages 58 to 62.
Remuneration Committee
The current members of the Remuneration Committee
are David Longbottom (Committee Chairman),
Charlie Scott, Alan Smith (all of whom served
throughout the year), Simon Laffin (who joined the
Committee during the year) and Timo Anderson
(who joined on 1 May 2014). Peter Smith also served
until his resignation from the Board.
The Remuneration Committee met six times during
the year. The attendance of the individual members
at meetings is detailed in the table on page 52.
The Remuneration Committees purpose is to advise
the Board and make recommendations to it about
all elements of the remuneration packages of the
Executive Directors and other members of senior
management as it is designated to consider, including
any major changes in employee benefit structures
throughout the Group.
The Company Secretary acts as secretary of the
Remuneration Committee. The Groups compliance
with the provisions of the Code relating to directors
remuneration is further explained on pages 66 to 83.
The Remuneration Committee meets at least
twice each year and may request relevant executive
directors and senior management to attend meetings
by invitation. During the year under review, the
Committee received material assistance and advice
from the Chairman, Chief Executive Officer and
the Director of Human Resources. No director
is involved in decisions relating to their personal
remuneration package.
The Remuneration Committee and the Group also
received advice from Kepler Associates, a firm of
independent remuneration consultants who have
not provided any other services to the Group.
The Committee has also been advised by Eversheds
LLP, who are the Groups solicitors and who
have advised the Group on other legal matters
throughout the year (including on various corporate,
regulatory, employment and commercial matters).
Eversheds LLP provided advice on the legal aspects
of the implementation and operation of Flybes
employee share schemes.
Governance
Financial and
other information
The responsibilities of the Remuneration

Committee include:
>>determining
and agreeing with the Board the

framework or broad policy for the remuneration
of the Chairman, Chief Executive Officer, all other
Executive Directors, the Company Secretary and any
other members of the executive management that
the Board delegates to it ensuring that such policy
provides appropriate incentives to encourage
enhanced performance and, in a fair and responsible
manner, rewards executives for their individual
contributions to the success of the Company.
When setting policy, have regard to trends across
the Company, in other companies and to the
provisions of the Code and associated guidance
>>determining
the total individual remuneration

package of the Chairman, Chief Executive Officer,
all other Executive Directors, the Company
Secretary and any other members of the executive
management that the Board delegates to it including
bonuses, incentive payments and share options
or other share awards
>>approving
the design of, and determining the targets

for, any performance related pay schemes operated
by the Company and approving the total annual
payments made under such schemes
>>approving
the design of all share incentive plans

for approval by the Board and shareholders,
determining on an annual basis whether awards
will be made, and if so the amounts of such awards
in total and to individuals
>>determining
the policy for, and scope of, pension

arrangements for each executive director and other
designated senior executives
>>overseeing
any major changes in employee benefits

structures throughout the Group
>>recommending
an annual report for the Board to

put to shareholders on the Companys remuneration
policies and practices compliant with relevant legal
and regulatory provisions
>>ensuring
that contractual terms on termination and

payments made are fair to the individual, and the
Company, that failure is not rewarded and that the
duty to mitigate loss is fully recognised
The Remuneration Committee is authorised

by the Board to:
>>be
exclusively responsible for establishing the

selection criteria and then for selecting, appointing
and setting the terms of reference for any
remuneration consultants providing advice to the
Remuneration Committee, at the Companys expense
>>to
obtain, at the Companys expense, expert legal

or other professional advice where necessary
in the course of its activities
55
Continued
Nomination Committee
The current members of the Nomination
Committee are Simon Laffin (Committee Chairman),
Saad Hammad, David Longbottom, Alan Smith and
Charlie Scott. Jim French (previous Committee
Chairman) and Mark Chown resigned during the year.
The attendance of the individual members at the
five meetings of the Nomination Committee held
during the year is detailed in the table on page 52.
The Nomination Committees purpose is to establish
a formal, rigorous and transparent procedure
for the appointment of new directors to the Board.
The Company Secretary acts as secretary of the
Nomination Committee.
The Code recommends that the majority of members
of the Nomination Committee should be independent
Non-Executive Directors. Throughout the period
the Nomination Committee has comprised David
Longbottom, Charlie Scott and Alan Smith all of whom
are Independent Non-Executive Directors, together
with Jim French and Mark Chown. Additionally, Simon
Laffin, the Independent Non-Executive Chairman of the
Board, was appointed to the Companys Nomination
Committee on 4 November 2013, served to the end
of the year and continues to serve. Saad Hammad also
joined the Committee during the year following his
appointment as Chief Executive Officer. The Board
is satisfied that the members of the Nomination
Committee are those who are best able to contribute
to its objectives.
The responsibilities of the Nomination
Committee include:
>>regularly
reviewing the structure, size and

composition (including skills, knowledge,
experience and diversity) of the Board and making
recommendations to the Board with regard to any
changes
>>keeping
under review the leadership needs of the

organisation, both executive and non-executive, with
a view to ensuring the continued ability to compete
effectively in the marketplace
>>evaluating,
before any appointment is made by the

Board, the balance of skills, knowledge, experience
and diversity on the Board and in light of this
preparing a description of the role and capabilities
required for a particular appointment
>>giving
full consideration to succession planning

for directors and other senior executives taking into
account the challenges and opportunities facing
the Company and the skills and expertise needed
on the Board in future
>>reviewing
the time requirements

of non-executive directors.
56
The Board fully supports diversity, recognising the

benefits that diverse viewpoints can contribute in
decision making. All Directors are committed to
encouraging all of the Groups employees, and its
Board, to reach their full potential, irrespective of their
gender, race, or sexuality. It is the intention of the
Board to always keep the benefits that derive from
a diverse Board in mind when making appointments.
However, the Board does not believe that setting
a quota is the most appropriate method for achieving
a balanced Board and all appointments are made on
merit. The Board remains committed to developing
talent throughout the Group, and to providing training,
support and development to those identified as
displaying potential.
During the year, the Committee discussed succession
planning and reviewed the composition of the Board
and of itself. The Committee oversaw a number of
recruitment processes for the Board. The search
for a new Chief Executive Officer was concluded
by an independent external search company, Harvey
Nash Group plc, which resulted in Saad Hammad being
identified as the outstanding candidate for the role.
The search for a new Chairman was conducted in
consultation with Flybes brokers, who assisted in the
identification of a short list of suitable candidates,
from which the Nomination Committee selected
SimonLaffin. JCA Group, a leading independent
executive search firm, was engaged to conduct a
search for a new Non-Executive Director to replace
Alan Smith, who is retiring from the Board, and
TimoAnderson was chosen from their short list
by the Nomination Committee.
The terms and conditions of appointment of all of the
Non-Executive Directors are available for inspection
at the Companys registered office during normal
business hours, and at the AGM. Each letter of
appointment sets out clearly what is expected
in the role, the anticipated level of time commitment
including, where relevant, additional responsibilities
derived from involvement in Board Committees.
Details of other material commitments are disclosed
to the Board and a register is maintained by the
Company Secretary.
Overview
Strategic report
Safety and Security Review Committee

The current members of the Safety and Security
Review Committee are Alan Smith (Committee
Chairman), Timo Anderson, Simon Charles, John
Palmer and Wayne Jenner (an external, independent
safety expert in this area, who was appointed in
January 2014). Peter Smith (formerly Committee
Chairman) and Andrew Strong sat on the Committee
until their resignations. Timo Anderson joined this
Committee on 1 May 2014 and will chair it on Alan
Smiths retirement from the Board on 31 August 2014.
The meeting is attended by the Accountable Managers
of the franchise partners and Flybe Finland. Individual
post holders are requested to attend as required.
The Safety and Security Review Committee met
on four occasions during the year. The attendance
of the individual Board members at meetings of the
Safety and Security Review Committee is detailed
in the table on page 52. The Safety and Security
Review Committees purpose is to establish, review
and monitor formal policies and procedures and have
oversight of performance in connection with the safe
and secure operation of the Groups business.
Governance
Financial and
other information
In addition to the updates provided to the Board after

each Safety and Security Review Committee meeting,
the Committee produces an annual report which is
reviewed and formally approved by the Board.
Mergers and Acquisitions Committee
The members of the Mergers and Acquisitions
Committee, who served until its dissolution in
November 2013 all of whom have served throughout
the year, were Alan Smith (Committee Chairman) and
Charlie Scott with Anita Lovell having being a member
until her resignation from the Board. No meetings
of the Committee were held during the year.
The purpose of the Mergers and Acquisitions
Committee was to scrutinise, via a formal and rigorous
process, major acquisitions or mergers and, where
appropriate, make recommendations to the Board.
The duties of the Mergers and Acquisitions Committee
have now been transferred to the Audit Committee
and Group Board.
The duties of the Safety and Security Review

Committee include:
>>reviewing
matters concerned with the safe and

secure operation (both in the air and on the ground)
of any aircraft operated by the Group, or any aircraft
carrying the Flybe Group brand or flight number
designation including its franchise operators, Logan
Air and (from June 2014) Stobart Air
>>reviewing
the performance, and output, of the Safety

Management System of Flybe Group companies and
its franchise partners
>>considering
reports on High Risk incidents involving

any aircraft operated by the Group and ensuring
that appropriate remedial action is taken including,
where appropriate, that recommendations are
made to third parties
>>considering
reports of significant incidents

concerning safety at airports and in engineering
facilities and ensure remedial action or appropriate
recommendations are implemented
>>reviewing
compliance with health and safety

legislation and aviation-specific safety requirements
>>ensuring
full attention is given to issues of security

and advice received from relevant national agencies
and authorities
57
Role
The primary function of the Audit Committee, which

met on six occasions during the year, is to assist the
Board in fullling its oversight responsibilities. This
includes reviewing the nancial reports and other
nancial information before publication. In addition,
the Committee also reviews the systems of internal
controls on a continuing basis, with respect to nance,
accounting, risk management, compliance, fraud
and audit that management and the Board
have established.
The Committee also reviews the accounting and
nancial reporting processes; along with reviewing
the roles and effectiveness of both the internal and
external auditors. The ultimate responsibility for
reviewing and approving the annual and other
accounts remains with the Board.
Charlie Scott
Chairman
Audit Committee
Dear shareholder
Responsibilities
The responsibilities of the Audit Committee, further

details of which can be found in its terms of reference
at www.flybe.com/en/corporate/governance include:
>>monitoring
the integrity of the Groups Financial

Statements and formal announcements relating
to Flybes performance and to review any significant
financial reporting issues and/or judgements
contained therein
The past year has been a busy one for the Audit
Committee at Flybe with our focus being on the
Groups control environment and managements
reporting of Flybes financial performance. The
Committee has been strengthened with the addition
of Flybes Chairman to our ranks Simon Laffin has
a wealth of experience in financial matters and brings
in a fresh view thanks to his exposure to a variety of
different sectors in his career.
>>keeping
We have maintained our oversight assisted by the work

of the internal and external audit teams. Internal Audit
has operated to a curtailed programme as agreed with
the Committee as focus on the Turnaround Plan has
dominated the need for resource. 2014/15 will see a
return to a more normal focus with a higher level of
audits planned.
>>considering
The healthy and constructive relationship with the

external auditors continues. The completion of the
2012/13 audit in June last year allowed us to see the
new audit partner in action having rotated on to us as
aclient for the first time. The level of professional
scepticism that is brought to bear by the external audit
team provides the Committee with a great deal of
comfort around the approaches followed by
management in forming their judgements.
under review the consistency of, and any

changes to, accounting policies, both on a year to
year basis and across the Group and challenging,
where necessary, the Companys Financial Statements
>>reviewing,
and challenging where necessary,

the strategic and business reviews and corporate
governance statement insofar as is relates to audit
matters or risk management
managements response to any major
external or internal audit recommendations
>>considering
applications for the post of Director

of Internal Audit and Special Projects, approving
appointments to the post and any dismissal of that
post holder
>>reviewing
the effectiveness of the Groups internal

controls and risk management systems
>>monitoring
the effectiveness of the external audit

process including the appointment, cost and
independence of the external auditor
see Auditor Independence on page 62
>>developing
and implementing policy on the

engagement of the external auditor to supply
non-audit services
>>ensuring
that clear and effective channels are

maintained for communication between the external
auditor and both the Audit Committee and the
Groups financial and senior management.
58
Overview
Strategic report
The Audit Committee undertakes its activities in line

with an annual work plan designed to ensure that it
meets its responsibilities under its terms of reference set
by the Board. The Audit Committee agrees the scope of
the external audit work and discusses the results of the
full year audit and half year review with the external
auditor, the Chief Financial Officer and Chief Executive
Officer. The ultimate responsibility for reviewing and
approving the annual and other accounts remains with
the Board, however the Audit Committee reviews these
documents and discusses them with the Chief Executive
and Chief Financial Officers, particularly areas where
there is subjectivity or the application of judgement,
before making recommendations to the Board.
The Audit Committee has responsibility for
recommending the appointment, re-appointment
and removal of the external auditor to the Board who,
in turn, will propose a resolution for consideration by
the shareholders. During the year the Audit Committee
considered the continuation of the appointment
of Deloitte LLP and, having regard to all of the facts
available to the committee, recommended the
re-appointment of Deloitte to the Board.
A review of the Groups whistle-blowing procedures
was undertaken to ensure arrangements are in place
to enable employees to raise concerns about possible
malpractice or wrongdoing by the Group or any
of its employees on a confidential basis. This includes
arrangements to investigate proportionately such
matters for appropriate follow up action. Further
promotion and advertising of the policy is planned
to ensure it is as far reaching across the organisation
as is possible.
Membership* and attendees
Governance
The Audit Committee met on six occasions during

2013/14. Details of the attendance at its meetings
are set out in the table on page 52.
The Chief Executive Officer, Chief Financial Officer,
Group Financial Controller, Group Financial
Accountant, Director of Internal Audit and Special
Projects, and representatives from the external auditor
are invited to attend all meetings of the Audit
Committee. The Director of Internal Audit and Special
Projects and the external auditor may also request
a meeting with the Audit Committee without any
member of management present if they consider
it necessary. In line with its terms of reference, the
Audit Committee members met with the external
auditor once during the year without
management present.
Main activities of the Committee

during the year
During the year the Audit Committees business

has included the following items:
>>reviewing
trading updates and interim

management statements
>>approving
policy for use of professional services

firms (including auditors on non-audit assignments)
>>full
year results, including review of the Annual Report

to ensure it is fair, balanced and understandable
>>principal
judgemental accounting matters affecting

the Group based on reports from both the Groups
management and the external auditors
>>external
audit plans and reports
>>reviewing
reports from the Director of Internal

Audit and Special Projects
>>approval
Internal
auditors
External
auditors
Financial and
other information
of the annual Internal Audit and Risk Plan
>>reviewing
internal controls and fraud prevention

policies and procedures
>>reviewing
C
harlie Scott
(chair)
Timo Anderson
Simon Laffin
Alan Smith
Bribery Act 2010 compliance policy

andprocedures
>>reviewing
the Audit Committees own terms

ofreference
>>reviewing
the effectiveness of the Audit Committee,

its membership and its terms of reference
Review of the Annual Report

Executive
management
Other
advisors
* All Audit Committee members are Independent Non-Executive

Directors. Simon Laffin was appointed during the year and
Timo Anderson on 1 May 2014.
The Committee examined, at the request of the Board,

the Annual Report to determine whether it was fair,
balanced and understandable. The Committee did this
by gaining an understanding of the drafting and
preparation process and the level of review and
challenge introduced to ensure balance and accuracy.
Training in this role was provided to the Board and
senior management responsible for drafting the Annual
59

Continued
as s
es s
me
nt
Assessments of:
Strategic risk
F
unctional risk
P
roject risk
S
upplier risk
iew
rev
Executive management
a nd
Audit Committee
ack
60
Group
Board
e db
In addition, the Audit Committee considers the report

prepared by Deloitte LLP highlighting any matters
identified in the course of its statutory audit work,
which is reviewed by the Audit Committee in the
presence of Deloitte LLP, Chief Executive Officer,
the Chief Financial Officer and the Director of Internal
Audit and Special Projects.
The Director of Internal Audit and Special Projects has

facilitated risk review workshops to identify risks, their
mitigations and impact:
fe
own
The Director of Internal Audit and Special Projects

reports to the Chief Executive Officer and attends
meetings of the Audit Committee which has approved
an annual Internal Audit and Risk Plan, designed to
provide effective risk based coverage over the internal
control environment, for the coming year. The key
objectives of the Internal Audit and Risk department
are to provide independent and objective business
assurance to the Board based on its approved risk
based audit plan.
In addition to the work of this Committee, the Safety

and Security Review Committee (which also reports
to the Board), chaired by an independent NonExecutive Director, meets quarterly, or more regularly
where events require, to review the Groups safety
performance.
d
Top
Through the Audit Committee, the Board has

conducted a review of the effectiveness of, and
framework for, the Groups system of internal control
and risk management systems during the year and
no material weaknesses were identified. The Audit
Committee considers formal reports prepared by
the Groups Internal Audit and Risk department and
ensures the annual Internal Audit and Risk Plan
reflects any material risks in internal control.
Monitoring reviews take place regularly within the

Groups operating divisions and monthly reports are
prepared for the Operating Board outlining events and
mitigating actions taken.
up
The Group has a clear internal control system, the

purpose of which is to safeguard investment and the
Groups assets, which accords with the Financial
Reporting Councils publication Internal Control: the
Revised Guidance for Directors on the Combined Code
(the Revised Guidance) which can be accessed at
www.frc.org.uk. The Board has overall responsibility
for maintaining, and reviewing the effectiveness of, the
Groups systems of internal control, including its joint
ventures, which covers financial, operational and
compliance controls together with risk management
systems. The responsibility for establishing and
operating detailed control procedures lies with the
Chief Executive Officer supported by the Operating
Board. However, the internal control systems are
designed to manage, not eliminate, the risk of failure
to achieve business objectives and to provide
reasonable but not absolute assurance that assets
are safeguarded against unauthorised use or material
loss, and that its transactions are properly authorised
and recorded.
The principal risks and uncertainties facing the

business are discussed on pages 34 to 37. The Board
has responsibility for determining the nature and
extent of the risks it is willing to take in achieving
its strategic objectives and for oversight of the risk
management process. Flybe has used the experience
gained over many years to develop structures and
processes to identify, evaluate, manage and report
on the significant risks faced by the Group. These
structures and processes, which are embedded within
Flybes operations, have been in place throughout the
year and up to the date of approval of this Annual
Report. The Board is satisfied that these structures
and processes ensure that risks are adequately and
appropriately addressed and corrective actions taken.
tom
Internal control and risk management
Review of business risk and its reporting

in the Financial Statements
Bot
Report by the Groups auditors, Deloitte LLP. After its

review of the process, consideration of management
and auditor papers on the Financial Statements and the
Annual Report and its own review of the Annual Report,
the Audit Committee concluded that the Annual Report
was fair, balanced and understandable and
recommended that the Board approve it on those terms.
Overview
Strategic report
The purpose of these workshops has been to review

enterprise-wide the likely risks to business objectives
so that the Board can update its understanding
of how well risks are understood and managed.
The findings are recorded in a Risk Register along
with their potential impact, the mitigations and
controls currently in place, and recommendations,
where possible, for risk reduction.
The Audit Committee and the Board review the
Risk Register annually and will do so more frequently
if necessary.
Risks identified
The Committee assesses whether suitable accounting

policies have been adopted and whether management
have made appropriate estimates and judgements.
The Committee reviews accounting papers prepared
by management which provide details on the main
nancial reporting judgements at both the half and
full years. The Committee also reviews reports by the
external auditors on the half year and full year results
which highlight any issues that have arisen as a result
of their work.
The signicant issues considered in the year are
detailed below, while the wider set of risks that impact
on the business are shown on pages 34 to 37:
>>The
Committee reviewed the maintenance provision

at the year end. A number of judgements are used
in the calculation of the provision, primarily utilisation
of aircraft, the cost of the relevant maintenance
activities as well as the timing of maintenance checks.
The Committee addressed these matters using
reports received from management which underlie
the basis of assumptions used. The Committee also
discussed with the external auditors their review of
the assumptions underlying the estimates used.
>>The
carrying value of joint ventures, intangible assets

and property, plant and equipment was reviewed
by the Committee and particular regard paid to the
judgements around the realisable value of aircraft
at the point of their disposal or hand-back to the
lessor. A number of judgements are made in these
calculations, including the discount rate applied
to future anticipated cash flows, the market value
of aircraft at the end of their expected life with Flybe
and in respect of the future anticipated financial
performance of Flybe UK and Flybe Finland.
>>The
Committee reviewed the adequacy of provisions

against revenue that had been recognised and
in particular whether the transition to new systems
in 2011/12 meant that previously established
provisions were no longer required. The key
judgement was around the level of likely refunds
of tickets that may be required in relation to those
that have been issued.
Governance
Financial and
other information
>>The
assessment of the amount of deferred tax assets

to recognise has been reviewed by the Committee
to determine whether an appropriate amount has
been recognised. Here, the Committee paid particular
attention to the period over which the deferred
tax asset would be recovered and whether
it was appropriate for this or a different amount
to be recognised.
>>The
restructuring of the business has led to

significant costs being incurred over an eighteen
month period. The Committee has reviewed the
amount and disclosure of such items and considered
whether the disclosure was adequate and consistent
with the prior year in both the Financial Statements
and the narrative disclosure in the Strategic Report.
>>The
defined benefit pension scheme inherited

with the acquisition of BA Connect in March 2007
is relatively sensitive to small movements in the
assumptions used to calculate the year-end balance
and the Committee reviewed these to determine
whether the amount reported and the disclosure
of it was appropriate.
In addition, the appropriateness of the going concern

assumption was a matter of discussion at the half
year (as it had been for the year to 31 March 2013)
and the disclosures in the published accounts and
announcements were carefully scrutinised to ensure
that the most appropriate information was put before
shareholders and investors. The 12 March 2014 Firm
Placing and Placing and Open Offer and the associated
net cash inflow of 150.1m meant that this risk was
significantly reduced by the time of this report.
External audit process
During the year, the Committee reviewed the

effectiveness of the overall audit process including
review of:
>>The
Annual Report and Financial Statements are fair,

balanced and understandable
>>Papers
on critical judgements, internal control and

fraud prepared by management
>>External
auditor papers detailing their audit plans as

well as on the results of their full year audit and halfyear review
>>The
independence and effectiveness of the external

audit itself
It is standard practice for the external auditors

to meet privately with the Audit Committee without
any member of management or the Executive
Directors being present at least once each year.
As a result of its reviews, the Audit Committee was
able to recommend the re-appointment of Deloitte LLP
to the Board.
61

Continued
Auditor independence
Auditor rotation
(A) A formal policy on the use of the external auditor

for non-audit work has been agreed by the Audit
Committee and is available on the Companys
website at www.flybe.com/en/corporate/
governance. In summary, this ensures that, usually,
such work is only awarded when, by virtue of the
auditors knowledge, skills or experience, the
external auditor is clearly to be preferred over
alternative suppliers. Any fees charged by the
Groups external auditor in respect of non-audit
services over a set cumulative value of, currently,
more than 50,000 requires the prior approval of
the Audit Committee. Under the policy, the external
auditor is specifically excluded from providing any
work that may impair their independence and from
providing internal audit services to Flybe.
Audit fees non-audit services
The Audit Committee is responsible for ensuring that

an appropriate relationship is maintained between the
Group and the external auditor. The external auditor
provides some non-audit services, primarily in the
provision of taxation advice and advice on corporate
transactions that may arise from time to time. In order
to ensure that auditor objectivity and independence
are safeguarded the following controls have been
implemented:
(B) The Audit Committee receives and reviews

each year an analysis of all non-audit work awarded
to the external auditor over the financial period.
A breakdown of the fees paid to the Groups
external auditor during the year is set out in note6
to the Consolidated Financial Statements and
further detail is highlighted below.
(C) The Audit Committee receives each year a report
from the external auditor as to any matters that
the external auditor considers have, or may have,
bearing on its independence and which need to
be disclosed to the Audit Committee. The Audit
Committee is satisfied that, notwithstanding nonaudit work, Deloitte LLP have retained objectivity
and independence during the year. The Audit
Committee will continue to monitor its policy in this
regard and accepts that non-audit work should be
controlled to ensure that it does not compromise
the independence of the external auditor.
The Company is considering its policy in the light
of new EU legislation on audit independence and will
revise its policy further once the detailed requirements
that will apply in the UK are known.
No contractual obligations that the Group has in place
limit the Audit Committee in its choice of auditors.
62
Group policy is that the external audit should be put

out to tender at least once in every ten years and
the audit firm shall be changed after no more than
20 years service. This policy will be put into effect
once the transitional provisions of the new regulations
on provision of services by auditors are finalised by the
UK Government. Deloitte LLP replaced another firm
as auditor for the March 2007 audit and the audit
partner rotated in the 2012/13 year.
The level of fees paid to the auditors for non-audit

services is as follows:
Audit fees (A)

Services provided
to satisfy legislative
or regulatory
requirements
Other non-audit
services (B)
Percentage (B/A)
2011/12
000
2012/13
000
2013/14
000
Average
218
201
225
215
290
97
469
215.1%
123
276
289
61.2% 122.7% 134.7%
Services provided to satisfy legislative or regulatory

requirements primarily include work on Class 1
Circulars or Prospectuses, with the fee in 2013/14
relating to the issuing of new shares that was
completed on 12 March 2014.
Other non-audit services relate to all other services
provided by the auditors. In 2011/12, the fees primarily
related to the work performed around the acquisition
of what is now Flybe Finland. Other fees include tax
advisory and compliance services. After deducting
work on all corporate transactions, the percentage
of non-audit services to audit services over a three
year average was 80.6%.
Charlie Scott
Chairman
Audit Committee
10 June 2014
Overview
Strategic report
Governance
Financial and
other information
Directors report
The Directors present their Annual Report on the

affairs of the Group, together with the Financial
Statements and Auditors Report for the year ended
31 March 2014. The Corporate Governance statement
on pages 49 to 57 forms part of this report.
An indication of likely future developments of the
business is included in the Strategic Report.
Content included in the Strategic Report
The Companies Act 2006 (as amended) requires

certain information to be included in either the
Directors Report, or where it is not, for that
information to be included in the Strategic Report
and cross-referenced. The items included in the
Strategic Report are:
Item
Greenhouse gas emissions

Employee involvement
Employment of disabled people
Diversity policy and reporting
Page number
43 and 44
39 to 41
40
41
Restrictions on share transfers
There are no restrictions on transfers of shares

other than:
>>where
the Company has a lien on a partly-paid share

unless to do so would prevent dealings in partly-paid
shares from taking place on an open and proper basis
>>where
the transfer is in favour of more than four

joint transferees
>>where
a transfer request is not accompanied by the

relevant share certificate(s) and such other evidence
as the Directors may reasonably require to show
the right of the transferor to make the transfer
>>certain
restrictions which may from time to time be

imposed by laws or regulations such as those relating
to insider dealing
>>pursuant
to the Companys code for securities

transactions whereby the Directors and designated
employees require approval to deal in the
Companys shares
>>in
Directors and Company Secretary
The Directors and Company Secretaries who served

during the year are shown on pages 46 to 48.
Dividends
No dividends are declared or proposed for either

this year or the prior one.
Share capital
Details of the movement in authorised and issued

share capital during the year are provided in note 28
to the Consolidated Financial Statements. 141,501,920
ordinary shares of 1 pence each were issued at 110p on
12 March 2014 for a cash consideration of 150.1m, net
of expenses. As at 31 March 2014, the Companys share
capital comprised a single class of ordinary share
of 1 pence each and the issued share capital of the
Company was 2,166,548 comprising 216.7 million
ordinary shares of 1 pence each.
The rights and obligations attaching to the Companys
ordinary shares are set out in the Companys Articles
of Association.
certain circumstances where the shareholder

in question has been issued with a notice under
s793 of the Companies Act 2006
>>where
a proposed transferee of the Companys

shares has failed to furnish the Directors with a
declaration of nationality (together with such
evidence as the Directors may require) as required
by the Companys Articles of Association
>>the
powers given to the Directors by the Companys

Articles of Association to limit the ownership of the
Companys shares by non-UK nationals or non-EEA
nationals and powers to enforce this limitation
including the right to force the sale of any
affected shares
As at 6 June 2014, the Company is not aware

of any arrangements between shareholders that
may result in restrictions on the transfer of securities
or voting rights.
Shares with special rights
There are no shares in the Company with special

rights with regard to control of the Company.
Restrictions on Voting Rights
The Notice of AGM specifies deadlines for exercising

voting rights and appointing a proxy or proxies to vote
in relation to resolutions to be passed at the AGM.
All proxy votes are counted and the numbers for,
against or withheld in relation to each resolution
are announced at the AGM and published on the
Companys website after the meeting.
63
Directors report
Continued
Relations with shareholders
A Relationship Agreement was in place between the

Group and its then principal shareholder, Rosedale
Aviation Holdings Limited (Rosedale), which
permitted Rosedale to appoint one person to the
Board if Rosedale held in excess of 15% of Flybes
Ordinary Shares and two people if it held in excess
of 30% of the Ordinary Shares. Rosedale sold all its
shares on 12 November 2013 and the Relationship
Agreement then terminated. Rosedale has no
representatives on the Board.
Political donations
Flybe did not make any political donations during the

year (2012/13: nil).
Substantial interests
On 6 June 2014, the Company had been notified,

in accordance with chapter 5 of the Disclosure and
Transparency Rules, of the following voting rights
as a shareholder of the Company:
Annual General Meeting
The Annual General Meeting (the AGM) provides the

Board with an opportunity to communicate with, and
answer questions from, private and institutional
shareholders and the majority of the Board will be
available at the meeting to answer shareholders
questions. The Chairmen of each of the Board
Committees will be available at the Annual General
Meeting to answer questions. At the AGM the Chairman
reports, after each show of hands, details of all proxy
votes lodged for and against each resolution and the
number of abstentions. Subsequently, the results are
published on the Groups website at www.flybe.com/
en/corporate/investors.
The Companys standard procedure is to ensure that
the Notice of AGM and related papers are sent to
shareholders at least 20 working days before
the meeting.
Employee share scheme
The Trustee of the Flybe Share Incentive Plan

(the Plan) will, on receipt of any offer, compromise
arrangement or scheme which affects ordinary shares
held in the Plan, invite participants to direct the Trustee
on the exercise of any voting rights attaching to the
ordinary shares held by the Trustee on their behalf
and/or direct how the Trustee shall act in relation to
those ordinary shares. The Trustee shall take no action
in respect of those ordinary shares for which it has
received no directions or ordinary shares which are
unallocated. Generally, on a poll, the Trustee shall vote
in accordance with directions given by participants.
In the absence of directions or on a show of hands
the Trustee shall not vote.
The Trustee of the Flybe Employee Share Trust (the
Trust), which is used in connection with the Flybe
Long-Term Incentive Plan, has the power to vote
or not vote at its discretion in respect of any shares
in the Company held in the Trust.
64
Name of holder
Percentage
of voting
rights and
issued share
capital
Aberforth
Partners LLP
SFM UK Management
LLP/Quantum
Partners LP
Artemis Investment
Management LLP
Standard Life
Investment Ltd
Pelham Long/Short
Master Fund Limited
International
Consolidated
Airlines Group, S.A.
The Wellcome Trust
Limited
Henderson Global
Investors
Hargreaves
Lansdown/
Threadneedle
Investments
Financial calendar
Annual General Meeting

First quarter IMS
Half-year results 2014/15
Third quarter IMS
Full year results 2014/15
Number
of ordinary
shares
Nature
of holding
14.1% 30,642,633 Beneficial

8.2%
17,749,263 Beneficial
7.9%
7.5%
5.7%
5.0% 10,925,847 Beneficial

4.9% 10,696,200 Beneficial
4.2%
3.6%
23 July 2014
August 2014
November 2014
February 2015
June 2015
The dates above are indicative and confirmation

will be listed on our website at www.flybe.com and
through RNS announcements.
Overview
Strategic report
Governance
Financial and
other information
Registered office
Jack Walker House

Exeter International Airport
Exeter
Devon EX5 2HL
Company registrar
Capita Registrars Limited

The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: 0871 664 0300
(Calls cost 10 pence per minute plus network extras)
Outside of the UK: +44 20 8639 3399
Company number
1373432
Auditor
Deloitte LLP
Abbots House
Abbey Street
Reading RG1 3BD
In the case of each of the persons who are Directors of
the Company at the date when this report is approved:
>>so
far as each of the Directors is aware, there is no

relevant audit information of which the Companys
auditor is unaware
>>each
of the Directors has taken all the steps that they

ought to have taken as a director to make themselves
aware of any relevant audit information and to
establish that the Companys auditor is aware of that
information
This confirmation is given and should be interpreted

in accordance with the provisions of s418 of the
Companies Act 2006.
Deloitte LLP have expressed their willingness to
continue in office as the Companys auditor and
a resolution to reappoint them will be proposed
at the forthcoming Annual General Meeting.
By order of the Board
Andrew Knuckey
Chief Financial Officer and Company Secretary
10 June 2014
65
Remuneration decisions for the year ended

31 March 2014
In the year ended 31 March 2014, the following changes

were made to the Board:
>>Saad
Hammad succeeded Jim French as Chief

Executive Officer in August 2013
>>Jim
French stepped down as Non-Executive

Chairman and a Director of Flybe in November 2013,
and was succeeded by Simon Laffin
>>As
Annual statement
Dear shareholder
I am pleased to introduce this years Remuneration
Report. As required by the new reporting regulations
which came into effect on 1 October 2013, this Report
is split into three sections:
(1) this Annual Statement,
(2) the Directors Remuneration Policy Report, and
(3) the Annual Report on Remuneration.
In line with the Regulations, the Directors
Remuneration Policy Report will be submitted
to a binding shareholder vote at the 2014 AGM and,
if approved, will be effective from that date for
up to three years. The Annual Report on Remuneration
will be submitted to a separate advisory vote.
Performance of the Group in the year

ended 31 March 2014
As the Chairman and Chief Executive Officer have

reported in their reviews on pages 8 and 14 Flybe
has undergone great change in the last 12 months,
not only in its management, but also in developing its
strategy and in cementing its balance sheet strength.
This has seen a significant improvement in financial
performance and has secured strong foundations for
the successful turnaround of the business as reflected
by the improvement in Flybes share price. As set out
below, these factors have influenced director
remuneration in a number of ways.
66
part of our business Turnaround Plan, Mark

Chown, Mike Rutter and Andrew Strong all stepped
down from the Board in August 2013 and the roles
of Director of Corporate Strategy, MD Flybe Europe
and MD Flybe UK were subsequently made
redundant. Messrs Chown and Strong have since
been serving their 12 month notice periods;
MrRutter left Flybe on 31 March 2014
>>Andrew
Knuckey announced his resignation

as CFO and will leave Flybe on 2 August 2014
These Board changes, and the Groups Turnaround

Plan, have had a significant impact on Executive
Director remuneration during the year under review.
On joining Flybe, Mr Hammad was awarded an interest
under a one-off long-term incentive (approved by
99.8% of shareholders at the 2013 AGM), incentivising
the turnaround of Flybe. On behalf of the Board, I wish
to commend Mr Hammad for donating his annual
bonus to charity.
In addition, the Committee had to consider and agree
the arrangements for Executive Directors stepping
down during the year under review, and these are
disclosed in more detail in the Annual Report on
Remuneration on pages 79 and 80.
Overview
Strategic report
Remuneration policy for the year commencing

1 April 2014
The restructuring of our senior executive team will

be complete once Philip de Klerk, our newly-appointed
CFO, joins the Group later this year. For the year
ending 31 March 2015, the Committee believes
it will be important to align the interests of Mrde Klerk
immediately with those of the senior executive team.
The Committee wishes, therefore, to avail itself of the
flexibility to make a one-off phantom option grant to
the CFO on joining with a similar structure to the senior
executive team long-term incentives awarded during
the past year. It is therefore proposed under the
recruitment remuneration policy on page 73 that an
incoming Executive Director (appointed from outside
the Group) will be eligible to receive a grant of up to
300% of salary on appointment under the Long-Term
Incentive Plan (LTIP), subject to shareholder approval
of the LTIP plan rules by separate resolution at the 2014
AGM. The option will vest subject to the achievement
of a minimum level of share price growth over three
years. To the extent the performance condition is met,
an amount equal to the embedded gain at the end of
the three-year performance period (capped at 300%
of the grant-date share price) will vest on a phased
basis between three and four years from grant.
Further details of the LTIP are set out in the Notice
of AGM and on pages 73 and 74.
Governance
Financial and
other information
The Committee welcomes and carefully considers

feedback from shareholders. We believe the
remuneration framework presented in this Report
will facilitate recruitment in the coming year and
is in the best interests of all shareholders, as it will
help incentivise successful delivery of the turnaround
which will underpin the Groups sustained performance
over the longer-term. I and my colleagues on the
Remuneration Committee hope that you support
this approach, and that you find the new layout
of the Remuneration Report to be clearer and more
transparent. We hope we can count on your support
for the Directors Remuneration Policy and its
implementation during the year.
David Longbottom
Chairman
Remuneration Committee
10 June 2014
The Committee has also approved a recommendation

by the Executive Directors that their salaries remain
unchanged for the financial year commencing
1 April 2014.
Remuneration policy for future years
The Committee recognises that exceptional

remuneration arrangements have been necessary
in 2013/14 (and will be necessary in 2014/15) to ensure
strong alignment to the immediate task of transforming
Flybes business over the short- and medium-term.
Once this transformation is complete, the Committee
believes a remuneration policy reflecting the
framework approved by shareholders on IPO
will likely be appropriate. For this reason, the
remuneration policy described in this Report includes
the Performance Share Plan (PSP), even though
no awards are proposed under the PSP in 2014/15.
We will consult shareholders, and seek approval
for any necessary revisions to this policy, at an
appropriate time.
67
Continued
Directors Remuneration Policy

Compliance statement
This report, which has been approved by the Board, has been prepared in compliance with the Listing Rules,
the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2013. In accordance with the Regulations, the following sections
of the Remuneration Report are subject to audit: the single total figure of remuneration for Directors and
notes (page 77), scheme interests awarded during the financial year (pages 78 and 79) payments to past
directors (page 80), payments for loss of office (page 80) and the statement of directors shareholdings
and share interests (page 83). The remaining sections of the report are not subject to audit.
This section of the report sets out a Policy for Executive Directors which shareholders are asked to approve at the
2014 Annual General Meeting. In line with the new reporting regulations, the Committee intends that the Policy
will come into effect immediately following the Annual General Meeting on 23 July 2014, for a period of up to
three years.
Directors Remuneration Policy
The Remuneration Committee and the Board believe that in order to attract, motivate and retain the individuals
required to deliver our strategy and create value for our shareholders, it is necessary to provide competitive,
market-based, remuneration packages that are directly aligned with group strategy, shareholder interests
and that have a substantial proportion of performance-related elements to create sustained growth in
shareholder value.
Policy Table
The following table summarises the Groups policies in respect of key elements of Executive Director
remuneration, as already approved by shareholders at IPO:
Function
Operation
Opportunity
Performance metrics
Basic salary
Basic salaries are reviewed

annually, taking into account
the size and nature of the role,
individual skills, experience and
performance, with reference
to pay and conditions elsewhere
in the Group, and external market
data for comparable positions
at companies of similar sector
and size to Flybe.
Salaries in respect of the year

under review (and for the
following year) are disclosed
in the Annual Report
on Remuneration.
Personal performance
in the role and against
personal objectives.
To attract and
retain talent.
Any increase in basic salary

is normally effective 1 April.
68
It is anticipated that salary

increases will generally be in line
with those awarded to salaried
employees as a whole. In certain
circumstances (including, but
not limited to, increases for other
employees, changes in role and
responsibilities, market levels,
and individual and company
performance), the Committee
may make appropriate
adjustments to salary levels
to ensure they remain market
competitive. The rationale for
any such increase will be
disclosed in the relevant Annual
Report on Remuneration.
Overview
Strategic report
Governance
Financial and
other information
Policy Table continued

Function
Operation
Opportunity
Performance metrics
Pension
Executive Directors are eligible

to participate in a contributory
scheme and may elect on a costneutral basis for the Group to
receive a monthly non-bonusable
cash supplement in lieu of
pension above the Pensions
Annual and Lifetime allowances.
Executive Directors receive a

contribution, or equivalent cash
supplement in lieu thereof,
of up to 15% of salary.
None.
Benefits vary by role and

individual circumstances;
eligibility and cost is reviewed
periodically.
None.
To provide
competitive
retirement
benefits.
Salary is the only element of

remuneration that is pensionable.
Benefits
To provide
competitive
benefits.
SIP, SAYE
To align the
interests of
employees and
shareholders by
encouraging all
employees to
own Flybe
shares.
Executive Directors receive

benefits which consist primarily
of car allowances, fuel card,
private medical insurance and
life assurance, although can
include any such benefits that the
Committee deems appropriate
to ensure the benefits package
is appropriately competitive and
reflects the circumstances of the
individual Director including, but
not limited to, accommodation/
relocation allowances.
SAYE All-employee scheme

under which all UK employees
(including Executive Directors)
may save up to the maximum
monthly savings limit (as
determined by legislation) over
a period of three or five years.
Options under the SAYE scheme
are granted at a discount
of up to 20% to the market value
of shares at the date of grant.
Benefits in respect of the year

under review are disclosed in the
Annual Report on Remuneration.
It is not anticipated that the
cost of benefits will vary
significantly year on year,
although the Committee retains
the discretion to approve
a higher cost in exceptional
circumstances (e.g. relocation)
or in circumstances where factors
outside the Companys control
have changed materially (e.g.
increases in insurance premiums).
Savings, contributions and
free shares are capped at the
prevailing legislative limit or
other such lower limit as the
Committee may determine
at the time UK employees
are invited to participate.
None.
SIP All-employee scheme

under which all UK employees
(including Executive Directors)
may (i) contribute up to the
monthly maximum (as determined
by legislation) to purchase shares
monthly from pre-tax pay;
and (ii) receive free shares up
to the annual maximum value
(as determined by legislation).
69
Continued

Function
Operation
Opportunity
Performance metrics
Annual bonus
The annual bonus is a

discretionary scheme, under
which performance targets are
agreed by the Committee at the
start of each financial year.
Payments (made following the
end of each performance year)
are based on the Committees
assessment of the Groups
performance against
these targets.
Maximum annual bonus

opportunity:
Performance is
assessed on an
annual basis, based
on the achievement
of quantifiable
personalised objectives
relating to the Groups
financial performance
and progress of
strategic priorities.
The specific measures
used in the bonus
and their weighting
may vary each year
depending on business
context and strategy.
Incentivise
and reward
Executive
Directors for
the delivery
of business
strategy.
CEO:
>>150% of base salary
Other Executive Directors:

>>100% of salary
Further details on the

bonus for the year
under review are
provided in the
Annual Report
on Remuneration.
Because of the specific one-off incentive award made on recruitment to the Chief Executive Officer (and that
which is expected be made to the new CFO), the Committee will review the policy for its long-term incentives
at such time as our transformation phase is nearing completion to ensure long-term incentives remain aligned
with our strategy. This will be the subject of consultation with shareholders. The structure for the PSP approved
by shareholders at IPO is set out below:
Function
Operation
Performance
Share Plan
No awards have been made under

the PSP since 2011/12 and there
is currently no intention to make
future awards to Executive
Directors without prior
shareholder consultation.
Incentivise
creation of
long-term
shareholder
value, and
supports
alignment with
shareholders
interests.
Awards comprise conditional

shares vesting on the third
anniversary of grant subject to
the achievement of three-year
performance conditions.
A payment equivalent to the
dividends that would have
accrued on the number
of shares that vest may
be made to participants on
vesting, as cash orshares.
Opportunity
Performance metrics
Maximum opportunity:
PSP awards have

historically been based
on a combination of
Flybes EPS growth and
Flybes TSR performance
relative to a comparator
group of companies.
The current policy isfor
the weighting on each
measure to not be less
than30%.
>>150% of salary
In normal circumstances,
however, the Committee would
grant awards with avalue below
this level. To-date, awards have
been up to 100% of salary.
Details of any awards granted
in a year will be disclosed
in the relevant Annual Report
on Remuneration.
The Committee
determines the
performance conditions
applying to PSP awards
as appropriate to the
circumstances at the
time of grant.
Further details
of measures, their
weighting and targets
will be disclosed in the
relevant Annual Report
on Remuneration.
70
Overview
Strategic report
Governance
Financial and
other information

In recognition of the immediate task of transforming Flybes business over the short- and medium-term, the
Committee wishes to avail itself of the flexibility to make one-off phantom option grants in connection to an
Executive Directors recruitment under a LTIP instead of the PSP. The structure of the LTIP, the plan rules of which
are subject to shareholder approval by separate resolution at the 2014 Annual General Meeting, is set out below:
Function
Operation
Opportunity
Performance metrics
Long-Term
Incentive Plan
Subject to shareholder
approval at the 2014 Annual
General Meeting.
Maximum opportunity:
>>300% of salary
The option will

vest subject to the
achievement of a
minimum level of share
price growth over the
three years from grant.
Incentivise
creation of
long-term
shareholder
value, and
supports
alignment with
shareholders
interests.
Over the life of this policy, it is

intended that the LTIP be used
to make awards to Executive
Directors in connection with their
recruitment to the Group only.
No awards will be made to an
Executive Director in other
circumstances without prior
shareholder consultation.
Details of any awards granted

in a year will be disclosed
in the relevant Annual Report
on Remuneration.
Further details of the

performance condition
will be disclosed in the
relevant Annual Report
on Remuneration.
Awards will comprise a phantom

option grant vesting subject
to the achievement of a three-year
performance condition. To the
extent the performance condition
is met, an amount equal to the
embedded gain at the end of the
performance period (capped
at 300% of the grant-date
share price) will vest 50% on the
3rd anniversary of grant, 25%
after a further 6 months and 25%
on the 4th anniversary of grant.
Unvested awards are also subject
to forfeiture inthe event of a
material misstatement ofresults.
Awards will not be made under
both the LTIP and the PSP
in any one financial year.
71
Continued
Notes to the Policy Table
The Committee is satisfied that the above

remuneration policy is in the best interests of
shareholders and does not promote excessive
risk-taking. In addition to the above elements of
remuneration, any commitment made prior to, but due
to be fulfilled after, the approval and implementation
of this remuneration policy will be honoured. Details
of such elements, including the one-off long-term
incentive opportunity awarded to Saad Hammad
on his appointment in August 2013 (approved by
shareholders at the 2013 AGM), are disclosed fully
in the Annual Report on Remuneration. Details of the
award proposed to be made to Philip de Klerk on his
joining Flybe later in 2014 will be disclosed fully in next
years Annual Report on Remuneration. Due to the
scale and criticality of the turnaround challenge, it was
not deemed appropriate to apply the shareholding
guideline (described below) to either the hiring
of the new Chief Executive Officer or the new CFO.
The Committee may exercise discretion in two broad
areas for each element of remuneration:
>>To
ensure fairness and align Executive Director

remuneration with underlying individual and company
performance, the Committee may adjust upwards
or downwards the outcome of any short- or longterm incentive plan payment within the limits of the
relevant annual bonus, PSP and LTIP scheme rules.
Any adjustments in light of corporate events will be
made on a neutral basis, i.e. the intention of any
adjustment will be that the event is not to the benefit
or detriment of participants. Adjustments to
underlying performance may be made in exceptional
circumstances to ensure outcomes are fair both
to shareholders and participants.
>>In
the case of a non-regular event occurring, the

Committee may apply its discretion to ensure
fairness and seek alignment with business objectives.
Non-regular events in this context include, but are
not limited to: corporate transactions, changes
in the Companys accounting policies, minor
or administrative matters, internal promotions,
external recruitment and terminations.
Any use of discretion by the Committee during the

financial year will be detailed in the relevant Annual
Report on Remuneration.
Shareholding guidelines
Executive Directors are required to retain 50% of any
net vested shares until they hold shares worth 100%
of base salary.
72
Performance measure selection and approach

to target setting
The annual bonus performance measures are selected
each year to directly reinforce our medium-term
business objective of returning to, and growing,
profitability (see page 19 of the Annual Report for
further details of our strategy). The one-off long-term
incentive granted to the Chief Executive Officer
on his recruitment (and the one-off LTIP to be granted
to the Chief Financial Officer on his joining Flybe later
in 2014) incentivises the recovery of, and further
growth in, Flybes share price over a three-year period.
The Committee selected this incentive design because
it felt this would provide the simplest measure of the
overall success of Flybes transformation programme
and provide clear alignment with shareholder interests.
Targets applying to the annual bonus are reviewed
annually, based on a number of internal and external
reference points. Bonus targets are aligned with the
annual budget agreed by the Board. Targets attached
to any future PSP awards will reflect Flybes business
priorities over the longer-term, industry context,
expectations of what will constitute appropriately
challenging performance levels and factors specific
to the Group.
Remuneration policy for other employees
The remuneration policy for other employees is based
on broadly consistent principles as described above.
Annual salary reviews across the Group take into
account company performance, local pay and market
conditions and salary levels for similar roles
in comparable companies.
Other members of the Groups Operating Board and
certain key management participate in similar annual
bonus arrangements to the Executive Directors,
although award sizes vary by organisational level.
All other employees participate in the Employee Bonus
Scheme, under which a bonus is payable subject to the
achievement of group profit targets. Operating Board
members and their direct reports also participate in a
long-term incentive scheme rewarding Flybes share
price performance over a three-year period, as
appropriate. All eligible employees participate in the
Companys SAYE and SIP schemes on identical terms.
Pay for performance scenarios
The Regulations require an illustration of the potential

future reward opportunities for the Executive Directors
under the future remuneration policy and the potential
split between the different elements of remuneration
under three different performance scenarios:
minimum, on-target and maximum. However,
because no future PSP awards are proposed as a result
of the one-off long-term incentive award made to the
Chief Executive Officer on his recruitment (and the
Overview
Governance
Strategic report
one-off LTIP expected to be made to the Chief Financial

Officer on his joining Flybe), the Committee believes it
is more appropriate (and transparent to shareholders)
to show the pay scenario charts on the basis of
current remuneration (with the recruitment long-term
incentives being annualised over their three-year
vesting period). No chart is shown for Mr Knuckey,
who announced in August 2013 that he was stepping
down as Chief Financial Officer.
>>In
the current turnaround phase, it is proposed that

any new Executive Directors appointed from outside
the Group (including the Chief Financial Officer) be
eligible for a one-off phantom option grant under
the LTIP worth up to 300% of salary (subject to
shareholder approval of the LTIP plan rules at the
2014 AGM). These options will vest subject to the
achievement of a three-year share price hurdle.
If the share price hurdle is met, an amount equal
to the embedded gain at the end of the three-year
performance period (capped at 300% of the grantdate share price) may vest. This will be paid 50% on
the 3rd anniversary of grant, 25% after a further six
months and 25% on the 4th anniversary of grant.
Unvested awards are also subject to forfeiture in the
event of a material misstatement of results.
Potential reward opportunities are based on base

salaries and annual bonus opportunities for 2014/15.
Note that long-term incentive awards normally do
not vest until at least the third anniversary of the date
of grant.
Approach to recruitment remuneration
External appointment
In cases of hiring or appointing a new Executive
Director from outside the Group, the Committee may
make use of all the components of remuneration
detailed in the Policy Table on pages 68 to 71, albeit
subject to the following variations:
Financial and
other information
>>The
Committee may make an award in respect of a

new appointment to buy-out incentive arrangements
forfeited on leaving a previous employer on a like-forlike basis (and with equal fair value), which may be
awarded in addition to the remuneration structure
outlined in the table above. In doing so, the
Committee will consider relevant factors including
time to vesting, any performance conditions attached
to these awards and the likelihood of those conditions
being met. Any such buy-out awards will typically be
made under the existing annual bonus and long-term
incentive schemes where possible, although in
exceptional circumstances, the Committee may
exercise the discretion available under the relevant
Listing Rule to make awards using a different
structure. Details of any buy-out awards will be
disclosed fully in the relevant Annual Report
on Remuneration.
>>Salary
will be determined with reference to market

data and will take into account the new appointees
duties and responsibilities, as well as internal
relativities. Where a new appointees salary is initially
set below market, the Committee may manage salary
progression with phased increases over a number
ofyears, subject to the Executive Directors
development in the role.
>>Annual
bonus opportunities will normally be prorated in the year of joining to reflect the proportion
of that year employed. Personal objectives will be
tailored to the Executive Director.
CEO Saad Hammad
CFO Philip de Klerk
Stretch
Stretch
30%
38%
1,668
32%
36%
On-target
51%
33%
16% 981
59%
Minimum
100%
0
893
32%
26%
15% 551
Minimum
504
500
Fixed pay
32%
On-target
Annual bonus
323
100%
1,000
1,500
2,000
Recruitment long-term incentive
250
Fixed pay
Annual bonus
500
750
1,000
Recruitment long-term incentive
The minimum scenario reflects base salary, pension and benefits (i.e. fixed remuneration) which are the only elements of the Executive
Directors remuneration packages not linked to performance.
The on-target scenario reflects fixed remuneration as above, plus target bonus pay-out of 50% of maximum and threshold vesting under the
CEOs August 2013 long-term incentive and the LTIP award for the CFO (assuming the embedded gain in the award is 30% of the face value).
The maximum scenario reflects fixed remuneration, maximum bonus, and vesting at Stretch performance of the CEOs August 2013 long-term
incentive and the LTIP award for the CFO (assuming the embedded gain in the award is 100% of the face value).
73
Continued
In determining appropriate remuneration, the

Committee will take into consideration all relevant
factors (including quantum, nature of remuneration
and the jurisdiction from which the candidate was
recruited) to ensure that arrangements are in the best
interests of both the Company and its shareholders.
Internal promotion
In cases of appointing a new Executive Director by way
of internal promotion, the policy will be consistent with
that for external appointees detailed above. Where an
individual has contractual commitments made prior
to their promotion to Executive Director level, the
Company will continue to honour these arrangements
even if there are instances where they would not
otherwise be consistent with the prevailing Executive
Director remuneration policy at the time of promotion.
Service contracts and treatment for leavers

and change of control
The Committees policy is to provide service contracts

for Executive Directors with notice periods of 12months
or less. Saad Hammad entered into a service
agreement dated 8 July 2013 and Andrew Knuckey
into a service agreement dated 9 December 2010.
Both service agreements are subject to 12 months
notice byeither party.
Upon termination, Executive Directors are entitled to
salary and benefits for the duration of their notice
period. It is the Committees policy to seek to mitigate
the need for such payments. Each Executive Director
has post-termination provisions which (among others)
restrict the Executive Director from competing with
Flybe for the duration of their notice period.
Executive Director service contracts are available
to view at the Companys registered office.
In the event that a participant ceases to be an
employee of Flybe, treatment of outstanding awards
under the Groups long-term incentive plans will be
determined based on the relevant plan rules. When
considering any such payments, the Committee
reviews all potential incentive outcomes to ensure
they are fair to both shareholders and participants.
>>Executive
Directors will normally not be entitled to

any bonus payment on termination of employment
(or if notice of termination has been given). In certain
good leaver circumstances, however, MrHammad
will be eligible to receive an annual bonus, pro-rated
for the portion of the financial year worked.
74
>>Under
the one-off recruitment long-term incentive

for Saad Hammad, the award will normally lapse
if MrHammad leaves Flybe before the end of the
performance period. At its discretion, the Committee
may vary this treatment in certain leaver
circumstances, i.e. where MrHammad is a good
leaver. In the event of a change of control,
performance will be tested over a curtailed period
based on the Companys market capitalisation on the
date of change of control.
>>Under
the rules for the LTIP (under which it is

proposed to make an award to Philip de Klerk on
his joining Flybe), awards will lapse in the event a
participant leaves Flybe, unless for reasons including,
but not limited to, death, ill-health, permanent
disability and redundancy. In these circumstances,
awards will normally be pro-rated for time and vest
at the normal time, subject to the achievement of
the performance condition over the complete
performance period. In the event of a change of
control, the award will normally be pro-rated for time
and vest based on performance over the period to
the change of control. At its discretion, the
Committee may vary these default treatments.
>>Note
that there are no awards outstanding under

the PSP.
Non-Executive Director remuneration
Non-Executive Directors (NEDs) do not have service

contracts. Instead, their services are provided for under
the terms of a letter of appointment with the Group
and are subject to six months notice by either party.
Details of the terms of appointment of the current
NEDs are provided opposite.
Overview
Strategic report
Governance
Financial and
other information
The NEDs are not eligible for bonuses or participation in share schemes and no pension contributions are made
on their behalf.
Non-Executive Director1
Charlie Scott
Alan Smith2
David Longbottom
Simon Laffin
Timo Anderson
Date of appointment
Expiry of current term
1 April 2006
1 April 2006
1 April 2006
4 November 2013
1 May 2014
31 March 2015
31 August 2014
31 March 2015
See below1
See below1
Appointment will be subject to shareholder approval at the 2014 AGM.

Alan Smith will retire from the Board on 31 August 2014.
Details of the policy on fees paid to our NEDs are set out in the table below:
Function
Operation
Opportunity
Performance metrics
Fees
Fee levels are reviewed

annually, with any adjustments
effective 1 April in the year
following review.
Non-Executive Director fee

increases are applied in line
with the outcome of the
annual fee review. Fees for
the year under review (and
the coming year) are set out
in the Annual Report on
Remuneration.
None.
To attract and retain

Non-Executive
Directors with broad
commercial and other
experience relevant to
the Company
The fees paid to the Chairman

are determined by the
Committee, while the fees of
the Non-Executive Directors
are determined by the
Executive Directors.
Additional fees are payable for
acting as Senior Independent
Director and as Chairman of
any of the Boards Committees
(Audit, Remuneration,
Safety & Security).
Fee levels reflect the skills and
experience of the NEDs, the
market practice adopted in
similar sized organisations and
anticipated time commitments.
It is expected that any

increases to NED fee levels
will be in line with salaried
employees over the life of the
policy. However, in the event
that there is a material
misalignment with the
market or a change in the
complexity, responsibility or
time commitment required to
fulfil the NED role, the Board
has discretion to make an
appropriate adjustment to
the fee level.
Recruitment policy for Non-Executive Directors
In recruiting a new Non-Executive Director, the Committee will use the policy set out in the table above. Abase
fee in line with the prevailing fee schedule would be payable for Board membership, with additional fees payable
for acting as Senior Independent Director or as Chairman of the Boards Committees, where appropriate.
External appointments
At the discretion of the Board, Executive Directors may be appointed as a Non-Executive Director at other
companies. Before granting permission, the Board will take into account, inter alia, the time commitment of the
new role, the competitive status of the other company, the Listing Rules and the Code.
Consideration of conditions elsewhere in the Company
The Company seeks to promote and maintain good relationships with employee representative bodies including
trade unions and employee representatives as part of its employee engagement strategy and consults on
matters affecting employees and business performance as required in each case by law and regulation in the
jurisdictions in which the Company operates. The Committee is also mindful of the salary increases applying
across the Group when considering salary increases for the Executive Directors. The Committee does not,
however, consult with employees specifically on the effectiveness and appropriateness of the executive
remuneration policy and framework.
75
Continued
Consideration of shareholder views
The Committee considers shareholder views received during the year and at each Annual General Meeting,
as well as guidance from shareholder representative bodies more broadly, in shaping remuneration policy.
The Committee continues to keep its remuneration arrangements under regular review, to ensure the
remuneration policy continues to reinforce the Companys long-term strategy and aligns closely with
shareholders interests. We will consult, and seek approval from, shareholders before making any significant
changes to our remuneration policy.
Annual report on remuneration
The following section provides details of how Flybes remuneration policy was implemented during the financial
year ended 31 March 2014.
Remuneration Committee membership

in the year ended 31 March 2014
The Committees purpose is to advise the Board and make recommendations to it about all elements of
the remuneration packages of the Executive Directors and other members of senior management as it is
designated to consider, including any major changes inemployee benefit structures throughout the Group.
The Committee has agreed terms of reference that are available on the Flybe website. The Group complied
with the provisions of the Code relating to Directors remuneration throughout the financial year.
The current members of the Committee are:
>>David
>>Timo
Longbottom (Committee Chairman)
Anderson (from 1 May 2014)
>>Simon
Laffin (from 4 November 2013)
>>Charlie
>>Alan
Scott
Smith
The Committee meets at least twice each year and may request relevant Executive Directors and senior
management to attend meetings by invitation. During the year under review the Committee received material
assistance and advice from the Chief Executive Officer and the Director of HR. No individual is involved in
decisions relating to their personal remuneration package.
During the year under review the Committee met on six occasions to consider, and agree, amongst other matters:
>>Executive
Directors basic salaries and cash bonus arrangements for 2013/14.
>>Terms
of the settlement agreement and other matters concerning the departures of Messrs Chown, French,
Rutter and Strong during the year.
>>The
remuneration package for MrHammad on his appointment as Chief Executive Officer in August 2013.
>>The
design of the Flybe Long-Term Incentive Plan 2013.
Advisers
During the year, the Committee and the Group received remuneration advice from Kepler Associates (Kepler),
a firm of independent remuneration consultants. Kepler is a founding member and signatory of the Code of
Conduct for Remuneration Consultants, details of which can be found at www.remunerationconsultantsgroup.com.
In 2013/14 Kepler provided independent advice and data in respect of the remuneration of the Executive Directors
and other senior executives, short- and long-term incentive design, and the drafting of this (and last years)
Directors Remuneration Report. Kepler does not advise the Company on any other issues other than remuneration
and is considered independent by the Committee. Their total fees (including expenses, but excluding VAT) for the
provision of remuneration services to the Committee in 2013/14 were 28,121 on the basis of time and materials.
During the year, Eversheds LLP provided advice on legal issues related to share scheme matters, as well
as on other matters not relating to remuneration in its capacity as the Groups legal advisors.
76
Overview
Governance
Strategic report
Financial and
other information
Summary of shareholder voting at the 2013 AGM
The following table shows the results of the advisory vote on the 2012/13 Remuneration Report at the 2013
Annual General Meeting:
Total number
of votes
For (including discretionary)

Against
Total votes cast (excluding withheld votes)
Votes withheld
Total votes cast (including withheld votes)
% of votes cast
56,397,181
67,336
56,464,517
54,816
56,519,333
99.88%
0.12%
100.00%
Single total figure of remuneration for Directors
The table below sets out a single figure for the total remuneration received by each Executive and Non-Executive
Director for the year ended 31 March 2014 and the prior year:
Year
Base salary/
fees3
2013/14
2013/14
2012/13
284,030
283,048
300,300
2013/14
Simon Laffin 1, 8
David Longbottom
2013/14
2012/13
Charlie Scott
2013/14
2012/13
Alan Smith
2013/14
2012/13
62,924
48,000
48,000
63,000
63,000
48,000
48,000
62,924
48,000
48,000
63,000
63,000
48,000
48,000
10,769
40,000
151,142
153,000
296,277
505,785
295,647
300,350
17,108
48,000
295,647
295,729
10,769
40,000
151,142
153,000
453,454
600,401
349,878
368,039
17,108
48,000
349,574
349,630
Executive Directors
Saad Hammad 1
Andrew Knuckey
Former Directors
Anita Lovell 1
Mark Chown1
Jim French2
Mike Rutter1
Peter Smith1
Andrew Strong1
1
2013/14
2012/13
2013/14
2012/13
2013/14
2012/13
2013/14
2012/13
2013/14
2012/13
2013/14
2012/13
Annual
bonus5
Benefits4
45,525
8,518
8,486
127,5007
PSP 6
Pension
Other
Total
42,500
45,713
45,706
499,555
337,279
354,492
11,643
19,186
8,518
8,486
46,034
75,430
45,713
59,203
8,214
8,188
45,713
45,713
During the year, Messrs Hammad and Laffin joined the Board
on 1 August 2013 and 4 November 2013 respectively. Messrs Chown,
Strong and Rutter resigned as Directors on 4 August 2013,
MrFrench resigned on 4 November 2013, Ms Lovell resigned
on 17 May 2013 and MrP Smith resigned on 8 August 2013.
2
MrFrench stepped down as Chief Executive Officer on 31 July 2013
and as Non-Executive Chairman and a Director on 4 November 2013.
The values in this single figure table reflect the remuneration
received by MrFrench in connection with being a Director over the
period 1 April to 4 November 2013.
3
Base salary includes a service increment of 350 for each of Messrs
Knuckey, Rutter and Strong. This approach is consistent with that
of other employees.
4
Taxable benefits comprise private health insurance, car allowance
(in 2013/14 9,667 for MrHammad; 7,000 for Messrs Knuckey,
Rutter and Strong; 10,125 for MrFrench) and a relocation allowance
99,5009
of 34,150 for MrHammad in connection to his appointment

as Chief Executive Officer during the year.
Payment for performance during the year. Details can be found
on page 78.
6
Reflects the value of PSP awards vesting for performance over a
period ending in the relevant financial year. For 2013/14, reflects the
lapsing of PSP awards awarded in August 2011. Details can be found
on page 83. For 2012/13, reflects the lapsing of IPO PSP awards
awarded in January 2011.
7
MrHammad will donate his bonus of 127,500 for the year
ended 31 March 2014 to charity (net of tax).
8
Fees in respect of Mr Laffin are paid to Simon Laffin Business
Services Limited.
9
Reflects payments in connection with Mr Frenchs cessation
of employment.
5
77
Continued
Incentive outcomes for the year ended 31 March 2014

Annual Bonus in respect of 2013/14 performance
Saad Hammad
In respect of the period since Saad Hammad joined on 1 August 2013 until 31 March 2014, the Committee
approved an annual bonus of 127,500, equal to 45% of his pro-rated salary for the period, reflecting his
outstanding personal performance and delivery of all his personal objectives including restructuring and
strengthening the organisation, a successful capital raise and development of the Groups strategic and
financial plan for the next five years. Given the level of redundancies associated with the Groups transformation,
Mr Hammad has elected to donate the net bonus amount in full to charity.
Other Executive Directors
For the year ended 31 March 2014, there was no annual bonus plan for other Executive Directors.
August 2011 PSP awards
Of the current Executive Directors, only Andrew Knuckey participated in the August 2011 PSP.
Long-term incentive awards in 2011 were made under the PSP. Vesting of awards was dependent on Flybes EPS
growth and relative TSR performance over the three-year performance period ended 31 March 2014. There were
no retest provisions under any of the awards. Further details, including vesting schedules and performance
against each of the metrics is provided in the table below:
Measure
Weighting
Targets
EPS growth
70%
TSR rank
vs. selected
comparators1
30%
0% vesting below 8% p.a.

25% vesting for 8% p.a.
100% vesting for 18% p.a. or more
Straight line vesting between these points
0% vesting below median
25% vesting for median performance
100% vesting for upper quartile performance or above
Straight line vesting between these points
PSP vesting outcome

1
Outcome
Vesting %
Below 8% p.a.
0%
Below median
0%
0%
Aer Lingus, Air France-KLM, Dart Group, Deutsche Lufthansa, easyJet, IAG, Ryanair, SAS, Air Berlin, Cimber Sterling and Finnair.
Based on performance over the performance period, the following awards did not vest and will lapse in full
on the third anniversary of the date of grant.
Executive
Andrew Knuckey
Interests
held
Vesting
%
Interests
vesting
Date vested
Market price
on vesting1
Value
173,410
0%
5 August 2014
117.2p
nil
Based on three-month average at 31 March 2014.
78
Overview
Strategic report
Governance
Financial and
other information
Scheme interests awarded in the year ended 31 March 2014
Saad Hammad
As part of his remuneration arrangements on joining Flybe, and as approved by shareholders at the 2013
Annual General Meeting, Saad Hammad received an award under the one-off LTIP which provides him with
an entitlement to a cash payment based on the incremental growth in Flybes market capitalisation over
a three year period commencing on 1 August 2013.
Under the terms of his award, Mr Hammad will be entitled to a cash sum equivalent to a fixed percentage of
the incremental increase in market capitalisation between 1 August 2013 and 31 July 2016. Starting and ending
market capitalisations for Flybe will be based on a three-month average market capitalisation to the relevant
date. Mr Hammad will receive a 4% share of any incremental increase in market capitalisation if the ending market
capitalisation is 150.0m or less. If the ending market capitalisation is greater than 150.0m, Mr Hammad will
receive 4% of the incremental increase between the starting market capitalisation and 150.0m and a 3% share
of any incremental increase in market capitalisation above the 150.0m threshold.
As disclosed in the Prospectus released on 20 February 2014 in connection to the Proposed Firm Placing and
Placing and Open Offer, the Committee further agreed that the Ending Market Capitalisation should be reduced
by the value of the aggregate subscription price paid for any new shares in the capital of the Company which
are issued after the date that the Chief Executive Officer joined the Company, but on or before the end of the
Performance Period. Accordingly, 156.0m will be deducted from the Ending Market Capitalisation, relating
to the fundraising completed in March 2014.
To the extent the award vests at the end of the three-year performance period, 50% of the award will be released
after three years, with the remainder released after further deferral periods of six months (25% of the award) and
12 months (25% of the award).
Other Executive Directors
No long-term incentive awards were made to other Executive Directors during the year ended 31 March 2014.
Exit payments made in the year
Mark Chown, Mike Rutter and Andrew Strong ceased to be Directors on 13 September 2013. Notice was served
in accordance with their service contracts, under which each Director continued to be entitled to base salary
(at the level prior to the voluntary salary sacrifice disclosed in last years Remuneration Report) and contractual
benefits over their 12-month notice periods. In line with the Committees policy to seek to mitigate payments for
Executive Directors contractual entitlements upon termination, Mr Rutter received 6.5 months of his 12-month
contractual pay and benefits, in line with the notice period he served until leaving the Group on 31 March 2014.
The PSP awards retained by Messrs Chown, Rutter and Strong lapsed following the end of the applicable
performance period. Details of all remuneration received by Messrs Chown, Rutter and Strong in respect
of the financial year ending 31 March 2014 are summarised in the single figure table on page 77.
Jim French was succeeded as Chief Executive Officer by Saad Hammad on 1 August 2013 and stepped down
as Non-Executive Chairman and a Director of Flybe on 4 November 2013. Other than those payments included
in the single figure table on page 77, benefits below a value of 1,000 and a contribution of 25,000 by the
Company towards his legal fees, Mr French is entitled to receive 199,000 in connection with his cessation of
employment. This comprises a contractual payment in lieu of notice of 154,000 (pursuant to his Letter of
Appointment) and a discretionary payment of 45,000 (to facilitate an orderly transition to the new Board)
as settlement of any claims in respect of the termination of his employment. 50% of the aggregate amount
was paid in January 2014, with the balance being paid in July 2014. As a retiree of the Company, Mr French
continues to be entitled to staff travel discounts. Mr Frenchs outstanding PSP and SIP awards lapsed on
cessation of employment.
79
Continued
Payments to past Directors
No payments to past Directors were made during the year.
Percentage change in Chief Executive Officer remuneration
The table below shows the percentage change in Chief Executive Officer remuneration from the prior year
compared to the average percentage change in remuneration for all employees.
The Chief Executive Officers remuneration includes base salary, taxable benefit and annual bonus and for
2013/14 includes the sum of payments made to Saad Hammad and Jim French (in respect of his executive role
until becoming Non-Executive Chairman on 1 August 2013). No employees have received pay rises (other than
through promotion or change in role) in 2013/14.
All
employees
CEO
2013/14
Base salary
Taxable benefits
Annual bonus
1
2
448,916
49,0131
127,5002
2012/13
505,875
19,186
% change
2013-2014
% change
2013-2014
(12.7)%
155.5%
n/a
0.0%
0.0%
n/a
Includes the relocation allowance in connection to MrHammads appointment as Chief Executive Officer during the year.
Mr Hammad has elected to donate his net annual bonus amount in full to charity.
Relative importance of spend on pay

The table below shows shareholder distributions (i.e. dividends and share buybacks) and total employee pay
expenditure for the financial years ended 31 March 2013 and 31 March 2014, along with the percentage change
in both.
Shareholder distributions
Total employee expenditure
2013/14
2012/13
% change
2013-2014
nil
98m
nil
124m
n/a
(21.0)%
Review of past performance
In line with the requirements of the Regulations, the chart below left shows the value of a hypothetical 100
holding from the date Flybes shares were priced immediately prior to IPO (being 10 December 2010) to
31 March 2014. The chart illustrates the TSR performance of the Group against the FTSE SmallCap Index.
The FTSE SmallCap Index was chosen as it is a recognised broad equity market index of which the Group
has been a member since Admission in December 2010.
The chart below right shows the value of a hypothetical 100 investment in Flybe since 1 August 2013, being
the date that Saad Hammad joined the Group, including the three-month averaging period preceding this date
that was used to determine the Starting Market Capitalisation under Mr Hammads recruitment LTIP award.
Both charts are based on spot share prices and calculated in pounds sterling.
80
Overview
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Strategic report
Financial and
other information
Historical TSR performance

Value of 100 invested on IPO
Value of 100 invested on 31 May 2013
300
300
200
200
100
100
9 Dec
2010
31 Mar
2011
Flybe
31 Mar
2012
FTSE SmallCap index
31 Mar
2013
31 Mar
2014
Saad Hammad joins Flybe

Announcement of Mr Hammads appointment
0
30 Apr
2013
01 Aug
2013
Flybe
31 Mar
2014
FTSE SmallCap index
The tables below detail the Chief Executives single figure remuneration over the same period, split between
Saad Hammad and Jim French for their respective tenures in the role.
Saad Hammad
Single figure of remuneration
Annual bonus outcome1 (% of max.)
LTIP vesting outcome (% of max.)
2010/11
2011/12
2012/13
2013/14
499,555
30%
n/a
Mr Hammad has elected to donate his net annual bonus amount in full to charity
Jim French
Single figure of remuneration
Annual bonus outcome (% of max.)
LTIP vesting outcome (% of max.)
2012/13
2013/14
589,689 606,785 600,401

0%
0%
0%
n/a
n/a
0%
212,395
0%
0%
2010/11
2011/12
Implementation of policy for the year commencing 1 April 2014
Base salary
For the coming year, Executive Director salaries will be frozen at their 2013/14 levels, as follows:
Saad Hammad
Andrew Knuckey
425,000
300,0001
From 1 July 2013, MrKnuckey elected to reduce his salary through four weeks salary sacrifice for a 12-month period.
This is reflected in the single figure of remuneration table on page 77.
On joining Flybe, Philip de Klerks annual base salary will be 285,000.
81
Continued
Implementation of policy for the year commencing 1 April 2014 continued
Pension
Executive Directors are eligible to receive a company pension contribution of up to 15% of basic salary and also
eligible to elect to join the main GPPP defined benefit scheme open to all UK employees. From April 2014, should
contributions exceed the new Pensions Annual Allowance of 40,000, or if further pension contributions mean
an individual exceeds the Lifetime Allowance, then the Executive Director may elect on a broadly cost-neutral
basis for the Group to receive a non-bonusable cash supplement equal to the pension contribution amount.
Saad Hammad and Andrew Knuckey have elected to receive their pension contributions as a non-bonusable
cash supplement. Philip de Klerk on joining Flybe will be offered the opportunity to participate in the Groups
approved pension salary sacrifice scheme, which is open to all UK employees.
Annual Bonus
The annual bonus for the 2015 financial year will be structured as disclosed in the Policy Table on page 70.
The Remuneration Committee has approved performance targets for the CEO bonus for 2014/15, which are
in line with the Groups objectives for year. They represent a set of demanding targets for delivering on both
new initiatives and continued corporate performance improvements. The measures and targets are considered
commercially sensitive at this stage but will be communicated in the next Annual Report.
Long-term incentive awards
Other than the long-term incentive award to be made to Philip de Klerk on his joining Flybe later in 2014,
no long-term incentive awards will be made to Executive Directors in the year ending 31 March 2015.
On joining Flybe, and in line with our Approach to Recruitment Remuneration, Mr de Klerk will receive a one-off
phantom option grant under the LTIP (subject to shareholder approval of the plan rules at the 2014 AGM) worth
300% of salary on the date of grant. This award will vest subject to the achievement of a three-year share price
hurdle that will be set at grant. If the share price hurdle is met, an amount equal to the embedded gain at the end
of the three-year performance period (capped at 300% of the grant-date share price) may vest. This will be paid
50% on the 3rd anniversary of grant, 25% after a further six months and 25% on the 4th anniversary of grant.
Further details of this award will be disclosed in next years Annual Report on Remuneration.
Chairman and Non-Executive Director fees
Non-Executive Director fees were last reviewed in April 2012 and the annualised fees payable to the NEDs
for the 2014/15 financial year are described below. The NED fee policy remains unchanged on that for the year
to 31 March 2014.
Simon Laffin
Charlie Scott
David Longbottom
Alan Smith1
Timo Anderson1
1
Basic fee
Committee
chairmanship
fee
Senior
Independent
Director fee
Total
150,000
40,000
40,000
40,000
40,000
8,000
8,000
8,000
8,000
15,000
150,000
63,000
48,000
48,000
48,000
lan Smith will retire from the Board on 31 August, and will be replaced as Chairman of the Safety & Security Committee by Timo Anderson
A
(who joined the Board on 1 May 2014).
82
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Directors interests
A table setting out the beneficial interests of the Directors and their families in the share capital in the year
under review.
Executive Director
Saad Hammad
Andrew Knuckey
Holding at
31 March 2014
Holding at
1 April 2013
227,272
223,125
223,125
Directors shareholding status
The table below shows the shareholding of each Director as at 31 March 2014:
Shares held
Options held
Owned
outright
or vested
Vested
but subject
to holding
period
Unvested
and subject
to perf.
conditions
Vested but
not exercised
Unvested
and subject
to continued
employment
227,272
223,125
227,272
35,093
20,833
45,499
790
Date of grant
Interests
held at
1 April 2013
Interests
awarded
during
the year
Interests
vested
during
the year
Interests
lapsed
during the
year
Interests
held at
31 March 2014
21 January 2011
5 August 2011
21 January 2011
84,745
173,410
100
100
84,745
173,410
Saad Hammad
Andrew Knuckey
Simon Laffin
David Longbottom
Charlie Scott
Alan Smith
Directors interests in shares and share options

PSP and SIP
Executive
Scheme
Andrew Knuckey
Andrew Knuckey
Andrew Knuckey
PSP
PSP 1
SIP2
PSP awards granted on 5 August 2011 were granted at the average market price of 173p of the last three trading days. The exercise price
is nil. Following the end of the performance period on 31 March 2014, the Committee determined that these awards would lapse in full.
The lapse of these awards will be disclosed in next years report.
2
Awards made under the SIP are subject to no further performance conditions, but are subject to a three-year holding period.
SAYE options
Executive
Interests
held at
1 April 2013
Andrew Knuckey
Granted
790
Exercised
Lapsed
Interests
held at
31 March 2014
790
Exercise price
Date from
which
exercisable
Expiry date
137p
5 August
2014
5 February
2015
On behalf of the Board
David Longbottom
Remuneration Committee Chairman
10 June 2014
83
Statement of Directors responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law,
the Directors are required to prepare the Group financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union and Article 4 of the IAS regulation and have
also chosen to prepare the parent company financial statements under IFRSs as adopted by the European Union.
Under company law the Directors must not approve the accounts unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that
period. In preparing these financial statements, International Accounting Standard 1 requires that Directors:
>>properly
select and apply accounting policies;
>>present
information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information;
>>provide
additional disclosures when compliance with the specific requirements in IFRSs are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the entitys
financial position and financial performance; and
>>make
an assessment of the Companys ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Companys transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Companys website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:

>>the
Financial Statements, prepared in accordance with International Financial Reporting Standards, give a true
and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
>>the
Annual Report, including the Strategic Report, and accounts taken as a whole is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Companys performance,
strategy and business model; and
>>the
Strategic Report includes a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
By order of the Board
Saad Hammad
Andrew Knuckey
10 June 2014
10 June 2014
84
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Financial and
other information

to the members of Flybe Group plc
Opinion on financial statements of Flybe Group plc
In our opinion:
>>the
financial statements give a true and fair view of the state of the Groups and of the parent companys affairs
as at 31 March 2014 and of the Groups profit for the year then ended;
>>the
consolidated financial statements have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union;
>>the
parent company financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
>>the
financial statements have been prepared in accordance with the requirements of the Companies Act 2006
and, as regards the consolidated financial statements, Article 4 of the IAS Regulation.
The financial statements comprise the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company
Statement of Changes in Equity, the Consolidated and Company Statement of Cash Flows and the related
notes 1 to 43. The financial reporting framework that has been applied in the preparation of the consolidated
financial statements is applicable law and IFRSs as adopted by the European Union and, as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
Going concern
As required by the Listing Rules we have reviewed the Directors Statement contained within the Strategic Report
that the Group is a going concern. We confirm that:
>>we
have concluded that the Directors use of the going concern basis of accounting in the preparation
of the financial statements is appropriate; and
>>we
have not identified any material uncertainties that may cast significant doubt on the Groups ability
to continue as a going concern.
However, because not all future events or conditions can be predicted, this statement is not a guarantee
as to the Groups ability to continue as a going concern.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had the greatest effect on our audit
strategy, the allocation of resources in the audit and directing the efforts of the engagement team:
Risk
How the scope of our audit responded to the risk
Aircraft maintenance provisions
We evaluated the methodology and key assumptions adopted

bymanagement in their calculation of the aircraft maintenance
provisions. This evaluation included:
>>testing the integrity and arithmetical accuracy of the provision
model; and
>>consideration and challenge of the consistency and
reasonableness of the assumptions adopted, including review
of lease terms and conditions, testing of source data for the
model, comparison of assumptions to recent interval and cost
experience and corroborative discussions with engineering
management, in particular in relation to asset lives and the
consistency of the provisions with their assessment
of aircraft condition.
Management continue to appropriately

recognise provisions for maintenance
obligations in relation to leased aircraft.
The quantification of these provisions require
complex judgements and estimates to be
made including considerations of aircraft
utilisation, expected maintenance intervals
and associated costs.
85

Continued
Our assessment of risks of material misstatement continued

Risk
How the scope of our audit responded to the risk
Carrying value of Flybe UK fixed assets

and the interest in Flybe Finland
We challenged the models used by management within their annual

impairment assessment for both Flybe UK and Flybe Finland
through benchmarking to independently available data and through
detailed challenge of the underlying assumptions supporting the
cash flow projections (including reference to historical accuracy of
forecasting), discount rates and sensitivity analysis performed by
management.
In accordance with IAS 36 Impairment of

assets, management have performed an
assessment of any impairment indicators and
their subsequent impact on the carrying value
of the Flybe UK fixed assets and interest in the
Flybe Finland joint venture.
There are a number of key judgements in
determining the impairment indicators and
the valuation of the recoverable amount
including assumptions underpinning forecast
revenue growth, profitability and cash flows,
together with the discount rates applied to
those forecasts.
Revenue recognition and provisioning
Management have previously recorded certain
provisions against revenue where revenue
data derived from the revenue reporting
systems, primarily arising from complex
codeshare arrangements, needed amendment
to properly reflect revenue in accordance with
the Groups revenue recognition criteria (as
set out in note 3 to the financial statements).
These provisions primarily arise from
activities such as inter-airline charge backs,
airpassenger tax recharges and ancillary
revenue. Their quantification can involve
complex data flows and in some cases
judgment on the likely volume of rejected
transactions.
Deferred tax asset recognition
Management judgement is required in
assessing the recoverability of the deferred
tax asset, based on the likelihood of sufficient
taxable profits arising in future period and the
likelihood that the tax assets will be utilised.
In addition, valuation specialists within the audit team provided

additional challenge over the discount rate applied to these cash
flows through the use of external confirmation and benchmarking.
We checked the arithmetical accuracy of the impairment model
and assessed the appropriateness and sufficiency of the disclosures
included in the financial statements.
We have carried out tests in relation to the design and

implementation of the key controls over revenue recognition
combined with appropriate substantive tests and analytical
procedures of related revenue and revenue provisions. We have
also challenged the judgements made in valuing the required
revenue provisions and comparisons of those judgments with
historical experience.
In addition, computer audit specialist members of the audit
team assist with the audit of the automated controls and the
reconciliation of data in the revenue reporting systems to the
general ledger.
We have evaluated managements process to prepare the deferred

tax calculation and considered the design and implementation of
the controls in this process.
We critically assessed the judgements over the level of forecast
taxable profits available to support the recoverability of the
deferred tax asset, involving tax specialists to assist with
ourassessment.
An assessment of the audit work performed by overseas audit firms
on Flybe Finland deferred tax balances was also carried out.
The Audit Committees consideration of these risks is set out on pages 60 and 61.
Our audit procedures relating to these matters were designed in the context of our audit of the financial
statements as a whole and not to express an opinion on individual accounts or disclosures. Our opinion on the
financial statements is not modified with respect to any of the risks described above and we do not express an
opinion on these individual matters.
86
Overview
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other information
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that
the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use
materiality both in planning the scope of our audit work and in evaluating the results of our work.
We determined planning materiality for the Group to be 1.7m, which is on a blended consideration of:
>>8.5%
of normalised profit before tax, being profit before tax adjusted to add back costs of one-off restructuring
and surplus capacity in 2014; and
>>0.27%
of group revenue, which is a less volatile measure than profit before tax.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess
of 34,000, as well as differences below that threshold that, in our view, warranted reporting on qualitative
grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the
overall presentation of the financial statements.
An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding of the Group and its environment, including groupwide controls and assessing the risks of material misstatement at the group level. Based on that assessment,
our group audit scope focused primarily on the audit work at two locations being in the UK, where the main
component business activity resides, and in Finland, for work in relation to the Flybe Finland joint venture.
Our audit work comprised a full scope audit both in the UK and in Finland where the extent of our testing was
based on our assessment of the risks of material misstatement and of the materiality of the Groups operations
at that location.
These components represent the principal business units and, together with head office, account for 100%
of the Groups net assets, revenue and profit before tax.
Our audit work in Finland was executed at a component materiality of 1.0m. The Group audit team directs
the planning and risk assessment of the Finnish component auditor, reviews and challenges of the component
auditors work and findings and attends a close meeting with local management.
At the parent entity level we also tested the consolidation process and carried out analytical procedures
to confirm our conclusion that there were no significant risks of material misstatement of the aggregated
financial information.
Opinion on other matters prescribed by the Companies Act 2006

In our opinion:
>>the
part of the Directors Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006; and
>>the
information given in the Strategic Report and the Directors Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
87

Continued
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:
>>we
have not received all the information and explanations we require for our audit; or
>>adequate
accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
>>the
parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors
remuneration have not been made or the part of the Directors Remuneration Report to be audited is not in
agreement with the accounting records and returns. We have nothing to report arising from these matters.
Corporate Governance Statement
Under the Listing Rules we are also required to review the part of the Corporate Governance Statement relating
to the Companys compliance with nine provisions of the UK Corporate Governance Code. We have nothing to
report arising from our review.
Our duty to read other information in the Annual Report
Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion,
information in the Annual Report is:
>>materially
inconsistent with the information in the audited financial statements; or
>>apparently
materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired
in the course of performing our audit; or
>>otherwise
misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge
acquired during the audit and the Directors Statement that they consider the Annual Report is fair, balanced and
understandable and whether the Annual Report appropriately discloses those matters that we communicated to
the Audit Committee which we consider should have been disclosed. We confirm that we have not identified any
such inconsistencies or misleading statements.
Respective responsibilities of directors and auditor
As explained more fully in the Directors Responsibilities Statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards
Ethical Standards for Auditors. We also comply with the International Standard on Quality Control (UK and
Ireland). Our audit methodology and tools aim to ensure that our quality control procedures are effective,
understood and applied. Our quality controls and systems include our dedicated professional standards review
team, strategically focused second partner reviews and independent partner reviews.
This report is made solely to the Companys members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Companys members
those matters we are required to state to them in an auditors report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and
the Companys members as a body, for our audit work, for this report, or for the opinions we have formed.
88
Overview
Strategic report
Governance
Financial and
other information
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Groups
and the parent companys circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the Annual Report
to identify material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies
we consider the implications for our report.
Anna Marks FCA (Senior statutory auditor)

for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor Reading, United Kingdom
10 June 2014
89
Consolidated income statement

Note
Total revenue under management

Less: Joint venture revenue
Group revenue
16
5
Consisting of:
Passenger revenue
Contract flying revenue
Revenue from other activities
Staff costs
Fuel
Net airport and en route charges
Ground operations
Maintenance
Depreciation and amortisation
Aircraft rental charges
Marketing and distribution costs
Other operating gains/(losses)
Other operating expenses
before joint venture results
2014
Before
restructuring
costs
m
2014
Restructuring
costs
(note 7)
m
2014
Total
m
2013
Before
restructuring
costs
(restated)
m
2013
Restructuring
costs
(note 7)
m
2013
Total
(restated)
m
868.4
(247.9)
620.5
868.4
(247.9)
620.5
781.5
(167.2)
614.3
781.5
(167.2)
614.3
553.9
16.2
50.4
620.5
553.9
16.2
50.4
620.5
551.8
12.8
49.7
614.3
551.8
12.8
49.7
614.3
(107.6)
(120.0)
(122.1)
(73.7)
(41.9)
(14.3)
(83.6)
(23.3)
11.4
(44.1)
(124.0)
(122.6)
(117.0)
(70.2)
(37.2)
(12.0)
(78.1)
(25.1)
(1.2)
(50.7)
(5.6)
(2.4)
(129.6)
(122.6)
(117.0)
(70.2)
(37.2)
(12.0)
(78.1)
(25.1)
(1.2)
(53.1)
(98.0)
(120.0)
(122.1)
(73.7)
(41.9)
(14.3)
(83.6)
(23.3)
0.9
(43.0)
(9.6)
10.5
(1.1)
1.5
(0.2)
1.3
(23.8)
(8.0)
(31.8)
Share of joint venture loss

16
6
(0.5)
1.0
(0.2)
(0.5)
0.8
(2.8)
(26.6)
(8.0)
(2.8)
(34.6)
Investment income
Finance costs
Other gains/(losses)
9
10
11
0.7
(1.7)
8.3
8.3
(0.2)
0.7
(1.7)
8.3
8.1
0.7
(2.5)
(4.7)
(33.1)
(8.0)
0.7
(2.5)
(4.7)
(41.1)
Tax charge
Profit/(loss) for the year
12
(0.1)
8.2
(0.2)
(0.1)
8.0
(1.1)
(34.2)
(8.0)
(1.1)
(42.2)
Earnings/(loss) per share:

Basic and diluted
90
13
9.6
(56.0)p
Overview
Strategic report
Financial and
other information
Governance
Consolidated statement of comprehensive income

2014
m
Profit/(loss) for the financial year

Items that will not be reclassified to profit or loss:
Remeasurement of net defined benefit obligation
Deferred tax arising on net defined benefit obligation
Items that may be reclassified subsequently to profit or loss:
(Losses)/gains arising during the year on cash flow hedges
Reclassification of gains/(losses) on cash flow hedges included in the income statement
Deferred tax arising on cash flow hedges
Foreign exchange translation differences
Other comprehensive (loss)/income for the year
Total comprehensive loss for the year
2013
(restated)
m
8.0
(42.2)
(2.2)
0.5
(1.7)
0.2
0.2
(15.7)
3.2
2.1
(0.6)
(11.0)
3.7
(2.8)
(0.8)
0.1
(12.7)
(4.7)
0.3
(41.9)
Consolidated statement of changes in equity

Balance at 1 April 2012

Loss for the year (restated)
Other comprehensive income
for the year (restated)
Equity-settled share-based
payment transactions
Balance at 31 March 2013
Profit for the year
Other comprehensive loss
for the year
Share capital issued
Share issue expenses
Share
capital
m
Share
premium
m
Hedging
reserve
m
Other
reserves
m
Capital
redemption
reserve
m
0.7
60.6
3.5
6.7
22.5
0.1
0.7
60.6
3.6
6.7
(11.0)
(7.4)
1.5
2.2
154.2
(5.6)
209.2
Retained
earnings/
(deficit)
m
Total
equity
m
(4.6)
(42.2)
89.4
(42.2)
0.2
0.3
22.5
0.6
(46.0)
8.0
0.6
48.1
8.0
(1.7)
(12.7)
6.7
22.5
0.6
(39.1)
0.6
155.7
(5.6)
194.1
91
Consolidated balance sheet

At 31 March 2014
Note
2014
m
2013
m
Non-current assets
Intangible assets
Property, plant and equipment
Interests in joint ventures
Other non-current assets
Restricted cash
Deferred tax asset
14
15
16
17
20
26
5.2
170.6
12.4
42.3
6.6
6.1
243.2
13.2
165.4
13.2
42.5
7.2
4.6
246.1
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Restricted cash
Derivative financial instruments
Assets held for sale
18
19
20
20
25
21
6.8
85.8
177.9
33.9
0.4
304.8
548.0
6.8
87.8
23.3
24.2
5.7
11.9
159.7
405.8
Current liabilities
Trade and other payables
Deferred income
Borrowings
Provisions
Derivative financial instruments
22
23
24
27
25
(82.0)
(70.7)
(10.4)
(45.3)
(8.0)
(216.4)
(97.9)
(63.2)
(18.7)
(26.9)
(1.5)
(208.2)
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Deferred income
Employee benefits
Liability for share-based payments
24
26
27
23
35
34
(91.1)
(1.6)
(31.9)
(9.5)
(2.5)
(0.9)
(137.5)
(353.9)
(102.3)
(2.6)
(33.8)
(10.8)
(149.5)
(357.7)
Total assets
Total liabilities
Net assets
Equity attributable to owners of the company
Share capital
Share premium account
Hedging reserve
Other reserves
Capital redemption reserve
Retained deficit
Total equity
28
29
30
194.1
48.1
2.2
209.2
(7.4)
6.7
22.5
(39.1)
194.1
0.7
60.6
3.6
6.7
22.5
(46.0)
48.1
The financial statements of Flybe Group plc, registered number 1373432, were approved by the Board of Directors
and authorised for issue on 10 June 2014.
Signed on behalf of the Board of Directors
Saad Hammad
92
Andrew Knuckey
Overview
Strategic report
Governance
Financial and
other information
Consolidated cash flow statement

2014
m
2013
(restated)
m
8.0
(42.2)
10.7
(1.3)
14.3
(0.7)
1.7
(8.3)
(0.2)
(0.4)
(10.5)
1.5
0.5
0.1
15.4
8.0
0.7
13.5
(0.7)
2.5
4.7
1.4
(11.6)
0.6
2.8
1.1
(19.2)
(12.8)
(9.1)
(8.2)
(9.8)
19.0
(20.9)
(1.4)
(6.7)
8.4
(0.2)
7.5
11.6
(3.0)
16.2
(5.5)
(3.0)
Cash flows from investing activities

Proceeds from sale of property, plant and equipment
Proceeds from sale of intangible assets
Proceed from sale of assets held for sale
Decrease/(increase) in pre-delivery deposits
Interest received
Acquisition of property, plant and equipment
Capitalised computer software expenditure
Acquisition of joint venture interest
1.3
17.5
12.3
11.8
0.7
(19.9)
(1.3)
10.6
(0.2)
0.7
(39.4)
(4.0)
(0.3)
Net cash flows from investing activities
22.4
(32.6)
Cash flows from financing activities

Proceeds from new loans
Net proceeds on issue of shares
Interest paid
Repayment of borrowings
14.7
150.1
(1.7)
(25.4)
39.5
(2.5)
(21.0)
Net cash flows from financing activities
137.7
16.0
Net increase/(decrease) in cash and cash equivalents
154.6
(19.6)
23.3
42.9
177.9
23.3
Cash flows from operating activities

Profit/(loss) for the year
Adjustments for:
Restructuring costs
Unrealised (gains)/losses on derivative contracts
Depreciation, amortisation and impairment
Investment income
Finance costs
Other net (gains)/losses
(Profit)/loss on sale of property, plant and equipment
Profit on sale of assets held for sale
Profit on sale of intangible assets
Transfer of property, plant and equipment to assets held for sale
Share-based payment expenses
Share of joint venture loss
Taxation
Cash paid in respect of restructuring costs

Increase in restricted cash
(Increase)/decrease in trade and other receivables
Increase in inventories
(Decrease)/increase in trade and other payables
Increase in assets held for sale
Increase/(decrease) in provisions and employee benefits
Tax paid
Net cash flows from operating activities
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year
93
Notes to the consolidated financial statements
1. General information
Flybe Group plc is a company incorporated in the

United Kingdom under the Companies Act 2006.
The address of the registered office is given on
page 65. The nature of the UK Groups operations
and its principal activities are set out in the Strategic
Report on pages 8 to 44.
These financial statements are presented in pounds
sterling because that is the currency of the primary
economic environment in which the Group operates.
2. Adoption of new and revised standards
The following amendments and interpretations are also

effective for the first time in the current year but have
had no impact on the results or financial position
of the Group:
Amendments to
IFRS 7 (December 2011)
IFRS 10
(May 2011)
IFRS 11
(May 2011)
IFRS 12
(May 2011)
IFRS 13
(May 2011)
IAS 27 revised
(May 2011)
IAS 28 revised
(May 2011)
Amendment to
IAS 19 (June 2011)
Financial Instruments
Disclosures
Consolidated Financial
Statements
Joint Arrangements
Disclosures of Interests
in Other Entities
Fair Value Measurement
Separate Financial
Statements
Investments in Associates
and Joint Ventures
Employee Benefits
At the date of authorisation of these financial

statements, the following Standards and Interpretations
which have not been applied in these financial
statements were in issue but not yet effective (and
in some cases had not yet been adopted by the EU):
IFRS 9
(November 2009)
Amendment to
IAS 32 (December 2011)
Classification and Measurement
Presentation
IAS 19 (revised 2011) Employee Benefits and the

related consequential amendments have impacted
the accounting for the Groups defined benefit scheme,
by replacing the interest cost and expected return
on plan assets with a new net interest charge on the
pensions scheme surplus or deficit. For the current
period, the profit and other comprehensive income is
in line with what would have been prior to the adoption
of IAS 19 (revised 2011). For the comparative period,
the restated loss is 0.4m higher, giving a loss before
tax of 41.1m (previously a loss of 40.7m), and other
94
comprehensive profit/(loss) is 0.4m better than

previously reported at a profit of 0.3m (previously
aloss of 0.1m). There is no impact on the net assets
or reserves position at either 31 March 2013 or
31 March 2012.
3. Accounting policies
Basis of accounting
The financial statements are prepared in accordance
with International Financial Reporting Standards
(IFRSs). The financial statements have also been
prepared in accordance with IFRSs adopted
by the European Union and therefore the Group
financial statements comply with Article 4
of the EU IAS Regulation.
The financial statements have been prepared
on the historical cost basis, except for certain
financial instruments that are recorded at fair value.
The principal accounting policies adopted, which
have been applied consistently in the current
and the prior financial year, are outlined below.
Basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company (its subsidiaries) made
up to 31 March each year. Control is achieved where
the Company has the power to govern the financial
and operating policies of an investee entity
so as to obtain benefits from its activities.
The financial statements of subsidiaries are included
in the consolidated financial statements from the
date that control commences until the date that
control ceases.
All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Going concern
The Directors have, at the time of approving the
financial statements, a reasonable expectation that
the Company and the Group have adequate resources
to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going
concern basis of accounting in preparing the financial
statements. Further detail is contained in the Financial
Review on page 33.
Business combinations
The cost of a business combination is measured as
the aggregate of the fair values at the date of exchange
of assets given and liabilities incurred or assumed
in exchange for control. The assets and liabilities
and contingent liabilities of the acquired entity are
measured at their fair values at the date of acquisition.
Overview
Strategic report
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Financial and
other information
When the initial accounting for a business combination

is determined provisionally, any adjustments to the
provisional values to reflect new information about
facts or circumstances which existed at the acquisition
date are made within 12 months of the acquisition date.
entitys identifiable assets, liabilities and contingent

liabilities is greater than the cost of the investment,
a gain is recognised and added to the Groups share
of the entitys profit or loss in the year in which the
investment is acquired.
Where the cost of a business combination exceeds

the net fair value of the acquired assets, liabilities
and contingent liabilities, goodwill is recognised as an
asset and initially measured at cost. Where the net fair
value of the acquired assets, liabilities and contingent
liabilities exceeds the cost of a business combination,
the identification of acquired assets, liabilities and
contingent liabilities is reassessed before recognising
the excess immediately in the income statement.
Costs associated with the acquisition of a joint venture

are capitalised into the initial cost of investment.
Investments in joint ventures

A joint venture is an entity over which the Group has
control jointly with one or more other parties and that
is neither a subsidiary nor an interest in an associate.
Joint control is contractually agreed sharing of control
over an economic activity, where the strategic financial
and operating decisions relating to the activity require
the unanimous consent of the parties sharing control.
Passenger revenue
Scheduled and charter passenger ticket sales, net
of passenger taxes and discounts, are recorded
in a forward sales account and are included in current
liabilities, within deferred income, until recognised as
revenue when transportation occurs. This also includes
revenue derived from flights operated by the Groups
codeshare partners.
The results and assets and liabilities of joint ventures

are incorporated in these financial statements using
the equity method of accounting, except when the
investment is classified as held for sale, in which
case it is accounted for in accordance with
IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations.
For flights purchased by members of the Frequent

Flyer Programme, an element of revenue representing
the sales value of flights which these customers may
take in future at no cost is deferred and recognised
when the related free flights have been taken.
The amount of deferral is based on the fair value
of an equivalent flight.
Under the equity method, the interest in joint ventures

is carried on the balance sheet at cost plus postacquisition changes in the Groups share of its net
assets, less distributions received and less any
impairment in value of the individual investments.
The Group income statement reflects the share of the
jointly controlled entitys results after tax. Where there
has been a change recognised in the comprehensive
income of the jointly controlled entity, the Group
recognises its share of any such changes in the Group
statement of comprehensive income. Losses of a joint
venture in excess of the Groups interest in that joint
venture (which includes any long-term interests that,
in substance, form part of the Groups net investment
in the joint venture) are recognised only to the extent
that the Group has incurred legal or constructive
obligations or made payments on behalf of the
joint venture.
Unused tickets are recognised as revenue when

the right to travel expires and the Groups obligation
to refund ceases, which is determined by the terms
and conditions of these tickets.
Any goodwill arising on the acquisition of a jointly

controlled entity, representing the excess of the cost
of the investment compared to the Groups share of the
net fair value of the entitys identifiable assets, liabilities
and contingent liabilities, is included in the carrying
amount of the jointly controlled entity and is not
amortised. To the extent that the fair value of the
Revenue and revenue recognition

Revenue is measured at the fair value of the
consideration received or receivable and represents
amounts receivable for goods and services provided
in the normal course of business, net of discounts,
VAT and other sales-related taxes and comprises:
Ancillary revenue, comprising principally baggage

carriage, advanced seat assignment, commissions,
change fees and credit and debit card fees due
to the Group, are recognised as revenue on the date
the right to receive consideration occurs. In respect
of credit and debit card fees and hotel and insurance
commission, this occurs when each flight is booked
and paid for. For the remaining ancillary revenue,
this occurs on the date of transportation, as this
is when the service is generally provided.
Commission received from the issue of Flybe branded
credit cards by a third party provider is deferred
to the extent that it relates to free flights which the
Group is required to offer as part of the transaction.
Commission received in excess of the sales value
of free flights granted to card-holders is recognised
immediately as revenue. Revenue associated with free
flights is recognised when the related flights are taken.
95

Continued
3. Accounting policies continued
Revenue and revenue recognition continued

Aircraft maintenance and other revenue
These represent the amounts derived from the provision
of goods and services to customers during the year,
including aircraft maintenance, overhauls and the
associated rotable and consumable parts. The amount
of profit attributable to the stage of completion of an
engine and maintenance overhaul contract is recognised
when the outcome of the contract can be foreseen with
reasonable certainty. Revenue for such contracts
is stated at the cost appropriate to the stage
of completion plus attributable profits, less amounts
recognised in previous years. Provision is made
for any losses as soon as they are foreseen.
Other revenues, such as for cargo and contract flying,
are recognised in the period when the services are
provided.
Interest revenue
Interest income is recognised when it is probable that
the economic benefits will flow to the Group and the
amount of revenue can be measured reliably. Interest
income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to that assets net carrying
amount on initial recognition.
Operating profit/(loss) is stated as profit/(loss) after
charging restructuring costs and after the share of
results of joint ventures but before tax, investment
income, finance costs and other gains and losses.
Foreign currencies
Transactions arising, other than in the functional
currency, are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are
re-translated using the rate of exchange ruling at the
balance sheet date. Non-monetary assets and liabilities
denominated in foreign currencies that are stated
at fair value are translated at foreign exchange rates
ruling at the dates the fair value was determined.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.
For the purposes of presenting Consolidated Financial
Statements, the assets and liabilities associated with
the Groups foreign operations (i.e. investment in joint
ventures) are translated at exchange rates prevailing
on the balance sheet date. Income and expense items
associated with the Groups foreign operations are
translated at the average exchange rate for the period.
Exchange differences arising, if any, are recognised
in other comprehensive income and accumulated
in equity. On disposal of a foreign operation, all of the
96
accumulated exchange differences in respect of that

operations attributable to the Group are reclassified to
profit or loss.
Exchange differences are recognised in the income
statement in the period in which they arise.
Property, plant and equipment are stated at their cost,
less accumulated depreciation and impairment losses.
Aircraft and engines and other associated equipment
are classified as aircraft. All other equipment
is classified as plant and equipment.
An element of the cost of a new aircraft is attributed on
acquisition to prepaid maintenance of its engines and
airframe and is amortised over a period from one to
five years from the date of purchase to the date of the
next scheduled maintenance event for the component.
Subsequent costs, such as long-term scheduled
maintenance and major overhaul of aircraft, are
capitalised and amortised over the length of period
benefiting from these costs. All other costs relating
to maintenance are charged to the income statement
as incurred.
Interest costs incurred on borrowings that specifically
fund progress payments on assets under construction,
principally aircraft, are capitalised up to the date of
completion and included as part of the asset.
Advance payments and option payments made in
respect of aircraft purchase commitments and options
to acquire aircraft where the balance is expected to be
funded by lease financing are recorded at cost in
current or non-current aircraft deposits. On acquisition
of the related aircraft, these payments are included as
part of the cost of aircraft and are depreciated from
that date.
Depreciation is provided by the Group to write off the
cost less the estimated residual value of tangible fixed
assets by equal instalments over their estimated useful
economic lives as follows:
Freehold land
Freehold and short
leasehold buildings
Plant, equipment
and motor vehicles
Aircraft
Maintenance assets
Nil
2% to 10% per annum
or lease term where shorter
10% to 50% per annum
7% to 20% per annum
25% to 50% per annum
Estimated residual values are reviewed annually at each

period end, with reference to current market conditions.
Where estimated residual values are found to have
changed significantly, this is accounted for prospectively
as a change in estimate and depreciation charges over
the remaining useful life of the asset are adjusted to take
account of the revised estimate of residual value.
Overview
Strategic report
Non-current assets held for sale

Where assets are available for sale in their current
condition, and their disposal is highly probable (there
is a committed plan to sell the asset and management
has initiated the process to locate a buyer), they are
reclassified as held for sale. Assets held for sale are
measured at the lower of their carrying value and the
fair value less costs to sell.
Depreciation on fixed or intangible assets ceases at the
point of their reclassification to assets held for sale.
Intangible assets
Computer software
Expenditure on development activities is capitalised if
the product or process is technically and commercially
feasible and the Group intends to, and has the technical
ability and sufficient resources to, complete
development and if the Group can measure reliably the
expenditure attributable to the intangible asset during
its development. The expenditure capitalised includes
the cost of materials, direct labour and an appropriate
proportion of overheads. Other development
expenditure is recognised in the income statement
as an expense as incurred.
Computer software is carried at cost less accumulated
amortisation. It is amortised on a straight-line basis
over its useful economic life of five years.
Landing rights
Intangible assets acquired are recognised to the extent
it is probable that expected future benefits will flow to
the Group and the associated costs can be measured
reliably. Landing rights acquired either as part of a
business combination or separately are capitalised at
fair value at that date and are not amortised where
those rights are considered to be indefinite. Landing
rights are considered to have an indefinite life only
when they will remain available for use for the
foreseeable future provided minimum utilisation
requirements are met. The carrying value of these
rights is subject to impairment testing annually
or when events or changes in circumstances indicate
that carrying values may not be recoverable.
Disposals of property, plant, equipment and
intangible assets
The gain or loss on disposal of property, plant,
equipment and intangible assets after deducting any
costs associated with selling, disposing of or retiring
the relevant asset is recognised in the income
statement and reported under other operating
gains or losses.
Governance
Financial and
other information
Impairment of tangible and intangible assets

excluding goodwill
At each balance sheet date, the Group reviews the
carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any).
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to
be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount.
An impairment loss is recognised as an expense
immediately.
Government grants
Government grants are not recognised until there
is reasonable assurance that the Group will comply
with the conditions attaching to them and that the
grants will be received. Once such assurance exists,
government grants are either recognised in the income
statement or, where related to property, plant and
equipment, are treated as deferred income and
released to the income statement over the expected
useful lives of the assets concerned.
Inventories
Inventories are stated at the lower of cost or net
realisable value as follows:
Aircraft consumables
These comprise aircraft parts which are non-repairable
and non-renewable. These are valued at the lower
of cost or net realisable value for each separately
identified batch purchased.
Aircraft deposits
Aircraft deposits represent deposits made with aircraft
manufacturers for future delivery of aircraft or deposits
made with aircraft financiers or operating lessors to
provide security for future maintenance work or lease
payments.
Financial instruments
Financial assets and financial liabilities are recognised
when the Group becomes a party to the contractual
provisions of the relevant instrument.
97

Continued
Classification of financial instruments issued

by the Group
Financial instruments issued by the Group are treated
as equity only to the extent that they meet the
following two conditions:
>>they
include no contractual obligations upon

the Group to deliver cash or other financial assets
or to exchange financial assets or financial liabilities
with another party under conditions that are
potentially unfavourable to the Group; and
>>where
the instrument will or may be settled in the

Companys own equity instruments, it is either
a non-derivative that includes no obligation to deliver
a variable number of the Companys own equity
instruments or is a derivative that will be settled
by the Company exchanging a fixed amount of cash
or other financial assets for a fixed number of its own
equity instruments.
To the extent that this definition is not met, the

proceeds of issue are classified as a financial liability.
Where the instrument so classified takes the legal form
of the Companys own shares, the amounts presented
in these financial statements for called up share capital
and share premium account exclude amounts in
relation to those shares.
Finance payments associated with financial liabilities
are dealt with as part of finance expenses. Finance
payments associated with financial instruments that
are classified in equity are treated as distributions and
are recorded directly in equity.
Derivative financial instruments and hedging
The Groups activities expose it primarily to the
financial risks of changes in foreign currency exchange
rates and commodity prices and uses forward foreign
exchange contracts and commodity swaps to hedge
these exposures. The Group does not use derivative
financial instruments for trading purposes.
Derivative financial instruments are initially recognised
and subsequently re-measured at fair value.
The Group designates hedges of foreign exchange
and commodity price risks on firm commitments
as cash flow hedges. Hedge accounting is applied
to these instruments.
Cash flow hedges
Changes in the fair value of derivative financial
instruments that are designated and are effective
as hedges of future cash flows are recognised directly
in other comprehensive income and any ineffective
portion is recognised immediately in the income
statement in the other gains and losses line item.
98
Amounts deferred in other comprehensive income are

recognised in the income statement in the same period
in which the hedged item affects net income or loss.
These amounts are recorded in the same line of the
income statement as the hedged item. However, when
the forecast transaction that is hedged results in the
recognition of a non-financial asset or a non-financial
liability, the gains and losses previously accumulated
in equity are transferred from equity and included
in the initial measurement of the cost of the nonfinancial asset or non-financial liability.
Hedge accounting is discontinued when the Group
revokes the hedging relationship, the hedging
instrument expires or is sold, terminated, or exercised,
or no longer qualifies for hedge accounting. Any gain
or loss recognised in other comprehensive income at
that time is accumulated in equity and is recognised
when the forecast transaction is ultimately recognised
in the income statement. When a forecast transaction
is no longer expected to occur, the gain or loss
accumulated in equity is recognised immediately
in the income statement.
Financial assets
All financial assets are recognised and derecognised
on a trade date where the purchase or sale of a financial
asset is under a contract whose terms require delivery
of the investment within the timeframe established by
the market concerned. Initially they are measured at fair
value, plus transaction costs, except for those financial
assets classified as at fair value through profit or loss
(FVTPL) or at fair value designated and effective
as hedges, which are initially measured at fair value.
Financial assets are classified into the following
specified categories: financial assets at FVTPL,
financial assets that are designated and effective
as hedging instruments and loans and receivables.
The classification depends on the nature and purpose
of the financial assets and is determined at the time
of initial recognition. The Group holds no availablefor-sale or held-to-maturity financial assets.
Financial assets at FVTPL
Financial assets are classified as at FVTPL when the
financial asset is either held for trading or is designated
as at FVTPL. A fuel or foreign exchange hedging
instrument is classified as held for trading if it is
a derivative that is not designated and effective
as a hedging instrument. A fuel or foreign exchange
hedging instrument may be designated as at FVTPL
upon initial recognition if the instrument forms part
of a group of financial assets or financial liabilities,
or both, which is managed and its performance is
evaluated on a fair value basis, in accordance with the
Groups documented risk management strategy, and
information about the grouping is provided internally
on that basis.
Overview
Strategic report
Financial assets at FVTPL are stated at fair value,

with any gains or losses arising on re-measurement
recognised in the income statement. The net gain
or loss recognised in the income statement
incorporates any dividend or interest earned on the
financial asset and is included in the unrealised gains
and losses on fuel and foreign exchange hedges
line item or other gains and losses line item in the
income statement depending upon the nature
of the instrument. Fair value is determined in the
manner described in note 36.
Loans and receivables
Trade receivables, loans and other receivables that
have fixed or determinable payments that are not
quoted in an active market are classified as loans and
receivables. Loans and receivables are measured at
amortised cost using the effective interest method,
less any impairment. Interest income is recognised
by applying the effective interest rate, except for
short-term receivables when the recognition
of interest would be immaterial.
Impairment of financial assets
Financial assets, other than those at FVTPL, are
assessed for indicators of impairment at each balance
sheet date. Financial assets are impaired where there
is objective evidence that, as a result of one or more
events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the
investment have been affected.
Derecognition of financial assets
The Group derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire; or it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to another entity. If the Group neither
transfers nor retains substantially all the risks and
rewards of ownership and continues to control the
transferred asset, the Group recognises its retained
interest in the asset and an associated liability for
amounts it may have to pay.
Cash, for the purposes of the cash flow statement,
comprises cash in hand and deposits repayable
on demand, less overdrafts payable on demand.
Governance
Financial and
other information
Cash equivalents are current asset investments which

are readily convertible into known amounts of cash at,
or close to, their carrying values or traded in an active
market, without curtailing or disrupting the business.
Restricted cash
Restricted cash represents funds held by the Group
in bank accounts which cannot be withdrawn until
certain conditions have been fulfilled. The aggregate
restricted funds balance is disclosed by way of a note
to these financial statements and is classified as a
current or non-current asset based on the estimated
remaining length of the restriction.
Financial liabilities and equity
Debt and equity instruments are classified as either
financial liabilities or equity instruments according
to the substance of the contractual arrangements.
Equity instruments
An equity instrument is any contract that evidences
a residual interest in the assets of the Group after
deducting all of its liabilities. Equity instruments issued
by the Group are recorded at the proceeds received,
net of direct issue costs.
Financial liabilities
Financial liabilities are recognised as either financial
liabilities at FVTPL, financial liabilities that are
designated and effective as hedging instruments,
or other financial liabilities.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when
the financial liability is either held for trading or it is
designated as at FVTPL. A fuel or foreign exchange
hedging instrument is classified as held for trading
if it is a derivative that is not designated and effective
as a hedging instrument. A fuel or foreign exchange
hedging instrument may be designated as at FVTPL
upon initial recognition if the instrument forms part
of a group of financial assets or financial liabilities,
or both, which is managed and its performance
is evaluated on a fair value basis, in accordance with
the Groups documented risk management strategy,
and information about the grouping is provided
internally on that basis.
99

Continued
Leased aircraft maintenance provisions

The Group incurs liabilities for maintenance costs
in respect of aircraft leased under operating leases
during the term of the lease. These arise from the
contractual obligations relating to the condition
of the aircraft when it is returned to the lessor.
To discharge these obligations, the Group will either
need to compensate the lessor for the element of the
life of the component or maintenance interval used,
or carry out the maintenance check before return
of the aircraft to the lessor.
Other financial liabilities

Other financial liabilities, including borrowings,
are initially measured at fair value, net of transaction
costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest
method, with interest expense recognised on an
effective yield basis. The effective interest method
is a method of calculating the amortised cost of
a financial liability and of allocating interest expense
over the relevant period. The effective interest rate
is the rate that exactly discounts estimated future cash
payments through the expected life of the financial
liability, or, where appropriate, a shorter period,
to the net carrying amount on initial recognition.
The provisions recorded and charged to the income

statement are dependent on the life of the component
or maintenance interval used and the individual terms
of the lease:
Financial liabilities continued

Financial liabilities at FVTPL are stated at fair value,
with any gains or losses arising on re-measurement
recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any interest
paid on the financial liability and is included in the
unrealised gains and losses on fuel hedges line item
or other gains and losses line item in the income
statement. Fair value is determined in the
following manner:
Derecognition of financial liabilities

The Group derecognises financial liabilities when, and
only when, the Groups obligations are discharged,
cancelled or they expire.
Provisions
Provisions are recognised when the Group has
a present legal or constructive obligation as a result
of a past event, it is probable that the Group will be
required to settle that obligation and a reliable
estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation at the balance sheet date, taking
into account the risks and uncertainties surrounding
the obligation. Where a provision is measured using
the cash flows estimated to settle the present
obligation, its carrying amount is the present
value of those cash flows.
When some or all of the economic benefits required
to settle a provision are expected to be recovered from
a third party, a receivable is recognised as an asset
if it is virtually certain that reimbursement will
be received and the amount of the receivable
can be measured reliably.
100
>>No
charge is recorded during the initial period

of lease agreements where no compensation
or maintenance is required prior to hand-back.
>>After
a component or maintenance interval

passes its half-life (or another measure depending
on the individual lease) and compensation would
be due to the lessor in accordance with the terms
of the lease, a provision and matching income
statement charge is recorded equal to the amount
of compensation that would be required based
on the hours or cycles flown at the balance
sheet date.
>>After
a component or maintenance interval has

passed the trigger point such that the Group
is contractually obliged to carry out the specified
work, a full provision for the cost of work is recorded.
To the extent that this provision represents an
increase to the half-life compensation provision
already recorded a maintenance asset is recorded
within property, plant and equipment. The asset
is depreciated over the expected period to the next
half-life compensation point, or the end of the lease,
whichever is sooner.
Where maintenance is provided under power by the

hour contracts and maintenance paid to maintenance
providers to cover the cost of the work is deemed
to be irrecoverable, these payments are expensed
as incurred and maintenance provisions are reduced
to reflect the fact that the Group has already paid for
the related maintenance work. Maintenance deposits
which are refundable are recorded as other receivables.
Estimates are required to establish the likely utilisation
of the aircraft, the expected cost of a maintenance
check at the time it is expected to occur, the condition
of an aircraft and the lifespan of life-limited parts.
The bases of all estimates are reviewed once each year
and also when information becomes available that
is capable of causing a material change to an estimate,
such as renegotiation of end of lease return conditions,
increased or decreased utilisation, or unanticipated
changes in the cost of heavy maintenance services.
Overview
Strategic report
Restructuring provision
A restructuring provision is recognised when
the Group has developed a detailed formal plan
for the restructuring and has raised valid expectations
in those affected that it will carry out the restructuring
by starting to implement the plan or announcing its
main features to those affected by it. The measurement
of a restructuring provision includes only the direct
expenditures arising from the restructuring, which
are those amounts that are both necessarily entailed
by the restructuring and not associated with the
ongoing activities of the entity.
Leases
Operating leases
Rental charges on operating leases are charged
to the income statement on a straight-line basis over
the life of the lease. In the event that lease incentives
are received to enter into operating leases, such
incentives are recognised as a liability. The aggregate
benefit of incentives is recognised as a reduction
of rental expense on a straight-line basis over the life
of the respective asset.
Sale and leaseback
The Group enters into sale and leaseback transactions
whereby it sells aircraft, or rights to acquire aircraft,
to a third party. Flybe subsequently leases the aircraft
back, by way of operating lease. Any profit or loss on
the disposal, where the price that the aircraft is sold
for is not considered to be fair value, is deferred and
amortised over the lease term of the asset.
Finance leases
Where the Group enters into a lease which entails
taking substantially all the risk and rewards of
ownership of an asset, the lease is treated as a finance
lease. The asset is recorded in the balance sheet as
property, plant and equipment, and is depreciated over
the estimated useful life to the Group. The asset is
recorded at the lower of its fair value, less accumulated
depreciation, and the present value of the minimum
lease payments at the inception of the finance lease.
Future instalments under such leases, net of finance
charges, are included as obligations under finance
leases. Rental payments are apportioned between
the finance element, which is charged to the income
statement, and the capital element, which reduces
the outstanding obligation for future instalments.
The finance charge is allocated to each period during
the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale,
are added to the costs of those assets, until such time
as the assets are substantially ready for their intended
use or sale.
Governance
Financial and
other information
Investment income earned on the temporary

investment of specific borrowings pending their
expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in the income
statement in the period in which they are incurred.
Taxation
Tax on the profit or loss for the year comprises current
and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items
recognised directly in equity, in which case
it is recognised in equity.
Current tax
The tax currently payable is based on taxable
profit for the year. Taxable profit differs from net
profit as reported in the income statement because
it excludes items of income or expense that are taxable
or deductible in other years and it excludes items that
are never taxable or deductible. The Groups liability
for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance
sheet date.
Deferred tax
Deferred tax is the tax expected to be payable
or recoverable on differences between the carrying
amount of assets and liabilities in the financial
statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted
for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are
recognised to the extent that it is probable that
future taxable profits will be available against which
deductible temporary differences arise from the initial
recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets
and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments
in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control
the reversal of the temporary difference and
it is probable that the temporary difference
will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the
asset to be recovered.
101

Continued
Taxation continued
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability
is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except
when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax
assets against current tax liabilities and when they
relate to income taxes levied by the same taxation
authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
Employee benefit costs
The Group operates defined contribution and defined
benefit pension schemes.
For the defined contribution schemes, the assets
of the schemes are held separately from those of the
Group in independently administered funds. The
amount charged to the income statement represents
the contributions payable to the schemes in respect
of the accounting period.
For defined benefit schemes, the cost of providing
benefits is determined using the Project Unit Credit
Method, with actuarial valuations being carried out
at the end of each reporting period. Remeasurement
comprising actuarial gains and losses, the effect
of the asset ceiling and the return on scheme assets
(excluding interest) are recognised immediately
in the balance sheet with a charge to the statement
of comprehensive income in the period in which they
occur. Remeasurement recorded in the statement of
comprehensive income is not recycled. Net-interest
income (or expense) is recognised within finance costs
and is calculated by applying a discount rate to the
net defined benefit liability. The Group presents the
administration costs of the scheme in other operating
costs in its consolidated income statement.
The retirement benefit obligation recognised in the
consolidated balance sheet represents the deficit in the
Groups defined benefit schemes. If a surplus resulted
from this calculation it would be limited to the present
value of any economic benefit available in the form
of refund from the schemes or reduction in future
contributions to the schemes.
102
Share-based payments
Equity-settled share-based payments to employees
and others providing similar services are measured
at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-marketbased vesting conditions. Details regarding the
determination of the fair value of equity-settled
share-based transactions are set out in note 34.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based
on the Groups estimate of equity instruments that
will eventually vest. At each balance sheet date, the
Group revises its estimate of the number of equity
instruments expected to vest as a result of the effect
of non market-based vesting conditions. The impact
of the revision of the original estimates, if any,
is recognised in profit or loss such that the cumulative
expense reflects the revised estimate, with a
corresponding adjustment to equity reserves.
SAYE share options granted to employees are treated
as cancelled when employees cease to contribute
to the scheme. This results in accelerated recognition
of the expense that would have arisen over the
remainder of the original vesting period.
For cash-settled share-based payments, a liability
is recognised for the good or services required,
measured initially at the fair value of the liability. At
each balance sheet date until the liability is settled and
at the date of settlement, the fair value of the liability is
remeasured, with any changes in fair value recognised
in profit or loss for the year.
4. Critical accounting judgements and key

sources of estimation uncertainty
In the application of the Groups accounting policies,

which are described in note 3, the Directors are
required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are
based on historical experience and other factors that
are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period, or in the period of the revision and future
periods if the revision affects both current and
future periods.
Overview
Strategic report
Critical judgements in applying the Groups

accounting policies
The following are the critical judgements, apart from
those involving estimations (which are dealt with
separately below), that the Directors have made
in the process of applying the Groups accounting
policies and that have the most significant effect
on the amounts recognised in financial statements:
Carrying value of aircraft
The Group had a net book value of approximately
147.0m for aircraft as at 31 March 2014. Changes to
the Groups estimation of useful lives, residual values
and potential for impairment would have a material
effect on the valuation of the Groups assets and
on its operating profit/(loss).
Useful lives and residual values are reviewed at the
end of each reporting period. Estimates of useful lives
of aircraft are based on judgements as to expected
usage of the aircraft, timing of maintenance events,
the Groups route and fleet plans and on changes
within the wider aviation industry. Estimates of residual
value are based on current market values of aircraft
in the same expected age and condition expected
at the end of the assets useful life to the Group.
The carrying value of aircraft, property, equipment
and other tangible assets is reviewed for impairment
at least annually and when events or changes
in circumstances indicate the carrying value may not
be recoverable. Factors that would indicate a potential
impairment of aircraft would include a significant
reduction in market values based on appraisers data
for the aircraft type, a significant change in the physical
condition of the aircraft and a reduction in forecast
cash flows arising from operating the asset. Carrying
value is assessed based on the appraised data and
forecast cash flows.
Aircraft maintenance
On acquisition of an aircraft, a proportion of the cost
of the aircraft is allocated to engines and other material
components with different useful lives to the airframe.
Judgement is required to determine the amount
of cost to allocate based on the estimated cost
of overhauling the components, and the time between
maintenance events. This judgement affects the
amounts recognised as a depreciation expense
given the different useful lives of the components.
For aircraft held under operating leases, the Group
has a commitment to return the aircraft in a specific
maintenance condition at the end of the lease term.
Estimating the provision for maintenance costs
requires judgement as to the cost and timing of future
maintenance events. This estimate is based on planned
usage of the aircraft, contractual obligations under
lease agreements, industry experience, manufacturers
guidance and regulations. Any change in these
Governance
Financial and
other information
assumptions could potentially result in a significant

change to the maintenance provisions and costs
in future periods.
Recognition of deferred tax assets
The Group recognises deferred tax assets and liabilities
based on the temporary differences between the
financial statement carrying amounts and the tax
bases of assets and liabilities. Deferred tax assets
are reviewed regularly to assess potential realisation,
and where the Directors believe that realisation is not
probable, that portion of the asset is not recorded.
In performing this review, Flybe makes estimates
and assumptions regarding projected future taxable
income, the expected timing of the reversals of existing
temporary differences and the implementation of tax
planning strategies. A change in these assumptions
could cause an increase or decrease in the amount
recognised resulting in an increase or decrease in the
effective tax rate, which could materially impact the
results of operations. As a result of the Groups
performance, the net deferred tax asset has increased
from 2.0m to 4.0m at 31 March 2014 (see note 26).
Restructuring provision
The Group recognises a restructuring provision when
the detailed formal plan for the restructuring has been
determined and has raised valid expectations in those
affected that it will carry out the restructuring by
announcing its main features to those affected
by it or implementing the plan. Flybe makes estimates
and assumptions particularly in relation to whether a
cost will be incurred, its value and the period in which
cash (or other resources) will leave the Group. A
change in these assumptions could cause an increase
or decrease in the amount recognised as a provision
which could materially impact the results of operations.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other
key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts
of assets and liabilities within the next financial
year are discussed below.
Employee benefits
Accounting for pensions and other postretirement
benefits involves judgement about uncertain events
including, but not limited to, discount rates, life
expectancy, future pay inflation and expected health
care cost trend rates. Determination of the projected
benefit obligations for the Groups defined benefit
scheme is important to the recorded amount of benefit
expense in the income statement and valuation of the
balance sheet. Details of the assumptions used are
included in note 35. Any change in these assumptions
could potentially result in a significant change to the
pension assets/(liabilities), commitments and pension
costs in future periods.
103

Continued
5. Business and geographical segments
During the financial year, the Groups divisions have been removed and the business has been refocused into
One Flybe. Under IFRS 8, Flybe reports three business segments in order to comply with accounting standards.
Comparatives for the year ended 31 March 2013 have been restated to correspond with the new structure.
The chief operating decision maker responsible for resource allocation and when assessing performance of
operating segments has been identified as the Operating Board. Operating segments are reported in a manner
which is consistent with internal reporting provided to the chief operating decision maker:
Flybe UK
Flybe Finland
MRO
This business segment comprises the Groups main scheduled UK domestic and UK-Europe
passenger operations and revenue ancillary to the provision of those services.
This business segment comprises the Groups Finnish contract flying and scheduled
passenger operations and revenue ancillary to the provision of those services.
This segment aims to provide aviation services to customers, largely in Western Europe.
The MRO supports Flybes UK and Finnish activities as well as serving third-party customers.
Segment revenues and results

Transfer prices between business segments are set on an arms length basis.
2014
m
Segment revenues:
Flybe UK
Flybe Finland
MRO
Inter-segment sales
Revenue under management
Less: Revenue from Flybe Finland joint venture (see note 16)
Group revenue (excluding investment income)
599.6
247.9
35.4
(14.5)
868.4
(247.9)
620.5
2014
Segment results:
Flybe UK (including net finance costs
of 1.4m in 2014 and 2.1m in 2013)
Flybe Finland (including investment income
of 0.4m in 2014 and 0.3m in 2013)
MRO
Total segment profit/(loss) before tax
2013
(restated)
m
589.4
167.2
40.5
(15.6)
781.5
(167.2)
614.3
2013 (restated)
Before
restructuring
costs
m
Net
restructuring
costs
(note 7)
m
Total
m
6.9
(0.2)
6.7
(28.4)
(4.1)
(32.5)
(0.8)
2.2
8.3
(0.2)
(0.8)
2.2
8.1
(3.5)
(1.2)
(33.1)
(3.9)
(8.0)
(3.5)
(5.1)
(41.1)
Before
restructuring
costs
m
Net
restructuring
costs
(note 7)
m
Total
m
The Flybe UK segment includes group costs of 3.6m (2012/13: 3.6m) and revaluation gains on USD aircraft
loans of 8.3m (2012/13: losses of 4.7m).
Flybe Finlands result includes both the appropriate share of the Flybe Finland joint venture result and other costs
of running this business.
For the purposes of monitoring segment performance and allocation of resources between segments, the
Operating Board monitors the tangible, intangible and financial assets attributable to each segment. All assets
are allocated to reportable segments with the exception of revalued open fuel and foreign exchange derivatives,
and tax assets and liabilities. Assets used jointly by reportable segments are allocated on the basis of the revenue
earned by individual reportable segments.
104
Overview
Strategic report
Governance
Financial and
other information
2014
m
2013
(restated)
m
Segment assets:
Flybe UK
Flybe Finland
MRO
Total segment assets
Unallocated assets
Consolidated total assets
508.6
13.4
19.5
541.5
6.5
548.0
361.2
13.8
20.4
395.4
10.4
405.8
Segment liabilities:
Flybe UK
Flybe Finland
MRO
Total segment liabilities
Unallocated liabilities
Consolidated total liabilities
(329.6)
(0.9)
(7.9)
(338.4)
(15.5)
(353.9)
(334.5)
(0.9)
(15.7)
(351.1)
(6.6)
(357.7)
Other segment information

2014
m
Depreciation and amortisation:

Flybe UK
MRO
Investment income:
Flybe UK
Flybe Finland
Additions to non-current assets:
Flybe UK
MRO
2013
(restated)
m
13.9
0.4
14.3
13.1
0.4
13.5
0.3
0.4
0.7
0.4
0.3
0.7
20.7
0.5
21.2
43.4
43.4
2014
m
2013
m
Geographical information
The Groups revenue from external customers by geographical location is detailed below:
Revenue under management from external customers:

United Kingdom
Europe excluding United Kingdom
Rest of world
Less: Joint venture revenue (all categorised as Europe excluding United Kingdom)
Group revenue
537.0
318.1
13.3
868.4
(247.9)
620.5
528.5
237.8
15.2
781.5
(167.2)
614.3
No non-current assets were based outside of the United Kingdom for any of the periods presented other than
joint venture assets.
Information about major customers
None of the Groups customers exceeded 10% of its Group revenue.
105

Continued
6. Operating profit
2014
m
This has been arrived at after charging/(crediting):

Depreciation of property, plant and equipment
Amortisation of intangible assets
(Profit)/loss on the disposal of property, plant and equipment
Profit on sale of intangibles
Profit on sale of assets held for sale at prior year end
Cost of inventories recognised as an expense
Reversal of write-downs of inventories recognised in the year
Write-down of inventories as a result of restructuring
Operating leases:
Land and buildings
Plant and machinery
Aircraft
Foreign exchange (gains)/losses
Auditors remuneration
The analysis of auditors remuneration is as follows:
Fees payable to the Companys auditor and its associates for the audit
of the Companys annual financial statements
Audit of the financial statements of subsidiaries pursuant to legislation
Total audit fees
Tax compliance and advisory services
Corporate finance services
Total audit and non-audit fees
2013
m
13.5
0.8
(0.2)
(10.5)
(0.4)
11.7
(0.7)
12.6
0.9
1.4
15.6
0.2
2.7
1.9
83.6
(0.2)
4.1
1.9
78.1
1.9
0.2
0.2
0.2
0.4
0.8
0.2
0.2
0.1
0.3
Fees payable to Deloitte LLP and its associates for non-audit services to the Company are not required to be
disclosed because the financial statements are required to disclose such fees on a consolidated basis. Details
of the Groups policy on the use of auditors for non-audit services, the reasons why the auditor was used rather
than another supplier and how the auditors independence and objectivity was safeguarded are set out in the
Audit Committee Report on page 62. No services were provided pursuant to contingent fee arrangements.
7. Restructuring
2014
Flybe UK2
m
Redundancy costs
Staff costs
Legal, professional and support costs
Property and other exit costs
Other operating expenses
Total restructuring costs
Profit on slot sales (note 14)
1
Restated figures for Flybe UK and MRO due to change in business segments see note 5.
All 2014 net restructuring costs relate to Flybe UK.
106
9.6
9.6
1.1
1.1
10.7
(10.5)
0.2
2013 (restated)1
Flybe UK
m
MRO
m
Total
m
2.8
2.8
1.2
0.1
1.3
4.1
4.1
2.8
2.8
1.1
1.1
3.9
3.9
5.6
5.6
1.2
1.2
2.4
8.0
8.0
Overview
Strategic report
Governance
Financial and
other information
8. Staff costs
The average monthly number of employees (including Executive Directors) was:
Flight and maintenance

Technical support services
Administration
2014
No.
2013
No.
1,250
564
371
2,185
1,418
724
525
2,667
2014
m
2013
m
79.4
9.0
6.6
1.5
1.5
98.0
9.6
107.6
103.0
11.0
7.1
0.6
2.3
124.0
5.6
129.6
The Groups aggregate payroll costs in respect of those persons were as follows:
Wages and salaries

Social security costs
Other pension costs (see note 35)
Share-based payments (see note 34)
Amounts payable to temporary staff
Redundancy costs (see note 7)
In addition to the above, an actuarial loss of 0.3m (2013: actuarial loss of 0.2m) was recognised in the
consolidated statement of comprehensive income in respect of defined benefit pension schemes.
9. Investment income
Interest on bank deposits

Net interest income on defined benefit costs (see note 35)
2014
m
2013
(restated)1
m
0.6
0.1
0.7
0.6
0.1
0.7
IAS 19 (revised 2011) Employee Benefits and the related consequential amendments have impacted the accounting for the Groups defined
benefit pension scheme, by replacing the interest cost and expected return on plan assets with a new interest charge - see note 2 for further
detail. These changes have been applied retrospectively in the comparative disclosure for the year ended 31 March 2013.
107

Continued
10. Finance costs
Interest expense on bank loans
2014
m
2013
m
1.7
2.5
2014
m
2013
(restated)1
m
11. Other gains and losses
Gains/(losses) arising on retranslation of foreign currency loans and deposits
8.3
(4.7)
benefit pension scheme, by replacing the interest cost and expected return on plan assets with a new interest charge see note 2 for further
12. Tax on profit/(loss) on ordinary activities

2014
m
Deferred tax
Origination of temporary differences
Reversal of tax losses recognised
Total tax charge for the year
2013
(restated)1
m
3.7
(3.6)
0.1
1.2
(0.1)
1.1
The Group did not incur or pay any current tax in this or the prior year.
The difference between the total tax shown above and the amount calculated by applying the standard rate
of United Kingdom corporation tax to the profit/(loss) before tax is as follows:
2014
m
2013
(restated)1
m
Profit/(loss) on ordinary activities before tax 1
8.1
(41.1)
Tax on profit/(loss) on ordinary activities before tax at 23% (2013: 24%)
1.7
(9.6)
0.1
(0.3)
3.5
(4.9)
0.1
0.1
(0.2)
(0.6)
11.4
1.1
Factors affecting tax charge for the year

Items outside the scope of UK taxation
Effect of change in corporation tax rate
Effect of tax losses
Capital allowances in excess of depreciation)/depreciation in excess of capital allowances
Total tax charge for the year
1
benefit pension scheme, by replacing the interest cost and expected return on plan assets with a new interest charge - see note 2 for further
The main rate of corporation tax reduces from 23% to 21% from 1 April 2014 and therefore 21% has been used
to calculate the position on deferred tax at 31 March 2014 (2013: 23%). The further phased reduction discussed
in the Budget on 19 March 2014, reducing the corporation tax rate to 20% from 1 April 2015, has not yet been
enacted. The Directors are not aware of any other factors that will materially affect the future tax charge.
108
Overview
Strategic report
Governance
Financial and
other information
13. Earnings per share
The calculation of the basic, diluted, adjusted basic and adjusted diluted earnings per share is based
on the following data:
2014
m
Earnings
Earnings/(loss) for the purposes of unadjusted earnings per share,
being net profit/(loss) attributable to owners of the Group
Add back:
Revaluation (gain)/loss on USD aircraft loans
Loss for the purposes of adjusted earnings per share
2013
(restated)1
m
8.0
(42.2)
0.2
(8.3)
(0.1)
8.0
4.7
(29.5)
2014
No.
Weighted average number of ordinary shares for the purposes

of basic and diluted earnings per share
Earnings/(loss) per ordinary share basic and diluted
Adjusted loss per share basic and diluted
2013
(restated)
No.
82,906,411
75,152,881
9.6p
(56.0)p
(0.2)p
(39.1)p
Diluted earnings per share is the same as basic earnings per share in the year ended 31 March 2014 because
none of the shares that could, potentially, be issued are dilutive. Diluted earnings per share is the same as basic
earnings per share in the year ended 31 March 2013 because the Group recorded a loss and as such none
of the shares that could, potentially, be issued are dilutive.
The weighted average number of shares reflects the impact of the issue of 141,501,920 ordinary shares
on 12 March 2014 as explained further in note 28.
109

Continued
14. Intangible fixed assets
Computer
software
m
Computer
software in
the course of
construction
m
8.9
1.1
10.0
0.6
10.6
2.9
2.9
0.7
3.6
7.3
0.9
8.2
0.8
9.0
7.3
0.9
8.2
0.8
9.0
Net book value

At 1 April 2012
8.5
1.6
10.1
At 31 March 2013
8.5
1.8
2.9
13.2
1.6
3.6
5.2
Landing
rights
m
Cost
At 1 April 2012
Additions
At 31 March 2013
Additions
Disposals
At 31 March 2014
Amortisation
At 1 April 2012
Amortisation for the year
At 31 March 2013
Amortisation for the year
At 31 March 2014
At 31 March 2014
8.5
8.5
(8.5)
Total
m
17.4
4.0
21.4
1.3
(8.5)
14.2
On 22 May 2013, the Group entered into an agreement with the easyJet Airline Company Limited to dispose of its
takeoff and landing rights (slots) at London Gatwick for a gross cash consideration of 20.0m. After expenses
of 1.5m, the profit on disposal was 10.5m.
110
Overview
Strategic report
Financial and
other information
Governance
15. Property, plant and equipment

Land
and
buildings
m
Cost
At 1 April 2012
Additions
Reclassified as held for sale
Disposals
At 31 March 2013
Additions
Disposals
At 31 March 2014
Plant,
equipment
and motor
vehicles
m
Aircraft
m
Total
m
24.5
0.1
24.6
0.1
(0.1)
24.6
15.7
3.0
(1.7)
17.0
0.5
(0.1)
17.4
206.6
36.3
(24.0)
(26.0)
192.9
19.3
(2.7)
209.5
246.8
39.4
(24.0)
(27.7)
234.5
19.9
(2.9)
251.5
4.3
0.5
4.8
0.5
5.3
10.7
1.6
(0.5)
11.8
1.4
(0.1)
13.1
69.7
10.5
(12.4)
(15.3)
52.5
11.6
(1.6)
62.5
84.7
12.6
(12.4)
(15.8)
69.1
13.5
(1.7)
80.9
Net book value

At 1 April 2012
20.2
5.0
136.9
162.1
At 31 March 2013
19.8
5.2
140.4
165.4
At 31 March 2014
19.3
4.3
147.0
170.6
Accumulated depreciation and impairment

At 1 April 2012
Depreciation charge for the year
On assets reclassified as held for sale
Disposals
At 31 March 2013
Depreciation charge for the year
Disposals
At 31 March 2014
Depreciation costs of 0.6m (2013: 1.5m) associated with the aircraft maintenance assets are included in the
maintenance cost line in the consolidated income statement.
An impairment review was performed at the balance sheet date to determine whether these assets were
impaired. Separate cash-generating units are established for Flybe UK and MRO. No impairment review was
required for the MRO. For Flybe UK, the recoverable amount was calculated using a value in use model and
determined to be higher than the assets recoverable amount by 28.6m and no impairment was required.
The key assumption in the review of the Flybe UK was the weighted average cost of capital used of 9.5%.
Only when the weighted average cost of capital is increased to 12.0% does the recoverable amount equal
its carrying amount.
111

Continued
16. Joint ventures
Investment in joint ventures
2014
m
2013
m
12.4
13.2
Details of the joint venture that the Group accounts for using the equity method are set out below:
Principal
activities
Holding
Country of
incorporation
and principal
operations
Airline
60.0 operations
Ordinary
shares
Finland
Equity
owned
%
Flybe Finland Oy
The following summarised financial information (under IFRS) shows the assets and liabilities and revenue and
results for Flybe Finland:
2014
m
2013
m
Summarised financial information:

Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net liabilities
9.9
21.8
(36.5)
(6.0)
(10.8)
11.5
26.2
(40.0)
(6.1)
(8.4)
Revenue
Net loss after tax
247.9
(0.8)
167.2
(4.9)
Other information:
Cash and cash equivalents included in current assets
Depreciation and amortisation
Interest expense
Income tax credit
8.3
(0.7)
(0.1)
0.2
5.4
(0.7)
(0.1)
1.6
Reconciliation of movement in the joint venture carrying amount:

Share of net assets brought forward
Share of net loss after tax and foreign exchange on translation
Carrying amount
13.2
(0.8)
12.4
16.2
(3.0)
13.2
See note 31 for details of the arrangements supporting the 3.0m overdraft guarantee provided by the Group
to Flybe Finland Oy.
The entities are not listed thus no quoted market price is available. No dividends have been received from
joint ventures.
Included within the carrying amount of the joint venture is 18.0m of goodwill.
An impairment review was performed at the balance sheet date to determine whether the investment in joint
ventures was impaired. The recoverable amount was calculated using a value in use model and determined to be
higher than the assets recoverable amount by 6.7m and no impairment was required. The key assumption used
in the review was the weighted average cost of capital of 9.5%. Only when the weighted average cost of capital
isincreased to 20.8% does the recoverable amount equal its carrying amount.
112
Overview
Strategic report
Governance
Financial and
other information
17. Other non-current assets
Aircraft deposits
Aircraft security deposits
Aircraft operating lease prepayments
Other non-current assets
2014
m
2013
m
3.1
6.9
6.5
25.8
42.3
1.8
8.1
9.0
23.6
42.5
2014
m
2013
m
6.8
6.8
0.8
6.0
6.8
2014
m
2013
m
18. Inventories
Goods for resale

Aircraft consumables
19. Trade and other receivables
Amounts receivable
Allowance for doubtful debts
Trade receivables, net
Amounts recoverable on contracts
Other receivables
Aircraft deposits
Prepayments
27.1
27.1
1.3
39.1
18.3
85.8
35.9
(0.1)
35.8
1.8
22.1
11.8
16.3
87.8
Trade receivables disclosed above are classified as loans and receivables and are therefore measured
at amortised cost.
Trade receivables include amounts (see below for aged analysis) which are past due at the reporting date but
against which the Group has not recognised an allowance for doubtful receivables because there has not been
a significant change in credit quality and the amounts continue to be considered recoverable.
The allowance for doubtful debts arises from trade customers in liquidation or with significantly overdue debts.
No impairment was recognised in the year to 31 March 2014 (2013: nil).
Ageing of trade receivables that are not provided for:
Not yet due

30 to 60 days overdue
60 to 90 days overdue
90+ days overdue
2014
m
2013
m
21.6
2.9
2.2
0.4
27.1
28.6
2.2
2.1
2.9
35.8
113

Continued
20. Cash, cash equivalents and restricted cash

Current restricted cash
Non current restricted cash
Restricted cash comprises:
Aircraft operating lease deposits
Aircraft maintenance deposits
Other (see note 31)
2014
m
2013
m
177.9
33.9
6.6
218.4
23.3
24.2
7.2
54.7
6.6
2.6
31.3
40.5
7.2
1.5
22.7
31.4
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three
months or less. The carrying amount of cash, cash equivalents and restricted cash is approximately equal
to their fair value.
21. Assets held for sale
At 31 March 2013, it was determined that two Bombardier Q400 turboprop aircraft with a carrying value of
11.9m would be recovered through a sales transaction and thus reclassified to assets held for sale. In May 2013,
the identified aircraft were sold for cash consideration of 12.3m and the associated loans repaid. There were no
assets held for sale at 31 March 2014.
22. Trade and other payables
Trade payables
Accrued expenses
Other payables
2014
m
2013
m
23.6
24.4
34.0
82.0
19.3
36.9
41.7
97.9
The carrying amount of trade payables approximates their fair value. The Group manages credit terms with
its suppliers in a way to ensure payments are made to them on commercially acceptable terms.
23. Deferred income
Current
Non-current
2014
m
2013
m
70.7
9.5
80.2
63.2
10.8
74.0
Deferred income includes government grants totalling 6.7m (2013: 6.8m) for capital financial support towards
the capital costs of the Flybe Training Academy building, a national training centre for the airline industry. Of this,
0.1m will be released within one year and 6.6m will be released after more than one year.
Government grants were provided by the South West of England Regional Development Agency and the
Learning Skills Council (and its successor). These institutions may be entitled to clawback all or part of the grant
up to 31 December 2020 if the Group ceases to operate the building as a training centre providing education and
training to internal and external delegates.
114
Overview
Strategic report
Financial and
other information
Governance
24. Borrowings
This note provides information about the contractual terms of the Groups interest bearing loans and borrowings.
For more information about the Groups exposure to interest rate and foreign currency risk, as well as the
repayment profiles, see note 36.
Secured bank loans

Amount due for settlement within 12 months
Amount due for settlement after 12 months
2014
m
2013
m
10.4
91.1
101.5
18.7
102.3
121.0
Borrowing costs amounting to 8.4m (2013: 9.1m) were capitalised in relation to qualifying assets.
Terms
2014
2013
Interest rate
%
Amount
m
Interest rate
%
Amount
m
3.2
2.2
3.1
5.4
9.2
87.5
4.2
0.6
101.5
2.7
1.4
3.2
5.4
17.7
97.9
4.6
0.8
121.0
Floating rate sterling loans

Floating rate US dollar loans
Fixed rate sterling loans
Fixed rate US dollar loans
The interest rate above relates to the weighted average for the year or period. Floating rates are based upon
LIBOR with margins of between 1.1% and 3.8%. The loans are repayable over a period to 31 March 2029. All loans
are secured on specific aircraft assets or land and buildings. All of the covenants tested have been satisfied since
inception of the agreements.
At 31 March 2014, the Group had 4.3m of unused borrowing facilities in the form of guarantees (2013: 2.7m).
25. Derivative financial instruments
Current assets
Forward foreign currency contracts/options
Fuel contracts/options
Derivative instruments that are designated and effective as hedging instruments
carried at fair value
Total derivative financial assets held as current assets
Current liabilities
Forward foreign currency contracts/options
Fuel contracts/options
Derivative instruments that are designated and effective as hedging instruments
carried at fair value
Total derivative financial assets held as current liabilities
Net derivative financial (liabilities)/assets
2014
m
2013
m
0.4
5.3
0.4
0.4
0.4
5.7
5.7
(7.5)
(0.5)
(0.2)
(1.3)
(8.0)
(8.0)
(1.5)
(1.5)
(7.6)
4.2
Further details of derivative financial instruments are provided in note 36.
115

Continued
26. Deferred tax
The following movements in the major deferred tax liabilities and (assets) were recorded by the Group
during the current and prior reporting period.
Property,
plant and
equipment
m
At 1 April 2012
Recognised in the income statement
Effect of rate change
At 31 March 2013
Recognised in the income statement
Recognised in other comprehensive income
Effect of rate change
At 31 March 2014
(4.9)
4.4
(0.1)
(0.6)
(1.7)
(2.3)
Intangible
assets
m
1.0
1.0
(1.1)
0.1
Employee
benefits
m
(0.1)
(0.5)
(0.6)
Financial
instruments
m
Tax losses
m
Total
m
1.1
(0.1)
1.0
(0.5)
(2.2)
0.1
(1.6)
(0.3)
(3.1)
(3.4)
3.8
(0.4)
(3.1)
1.2
(0.1)
(2.0)
(0.4)
(2.7)
(0.2)
(4.5)
2014
m
2013
m
2014
m
2013
m
3.9
0.6
1.6
6.1
1.2
3.4
4.6
(1.6)
(1.6)
(0.6)
(1.0)
(1.0)
(2.6)
Deferred tax assets and liabilities are attributable to the following:

Assets

Intangible assets
Employee benefits
Financial instruments
Tax value of loss carried forward
Tax assets/(liabilities)
Liabilities
Where carried forward losses or unclaimed capital allowances are available, they are recognised to the extent
that it is probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
At each balance sheet date, the Group recognised deferred tax assets primarily on previously unrecognised
losses or unutilised capital allowances. The recognition of an asset, as well as the composition of that asset,
was a result of managements judgement that it was probable that it would realise such deferred tax assets
in future periods, when taking into consideration the availability of feasible tax planning strategies and
estimates of future taxable income in which these operating losses and other tax attributes exist.
The Group has significant deferred assets due to the accumulation of accelerated capital allowances in prior
periods. The realisation of these assets is not assured and is dependent on the generation of sufficient taxable
income in the future. The Directors have exercised judgement in determining the extent of the realisation
of these losses based upon estimates of future taxable income. Where there is an expectation that on the
balance of probabilities there will not be sufficient taxable profits to utilise these assets, they have not been
recognised. If actual events differ from the Directors estimates, or to the extent that these estimates are
adjusted in the future, any recognition in the future of previously generated assets would have a material
impact on the Groups effective tax rates.
The Group has fully recognised the deferred tax asset in relation to capital allowances at 31 March 2014
(2013: 6.0m unrecognised).
No deferred tax asset has been recognised in respect of these items as it is not considered probable that there
will be future taxable profits available. These unutilised deferred tax assets may be carried forward indefinitely.
During the period the Group has reflected the change in the enacted tax rate from 23% to 21%, which
is effective from 1 April 2014. 20% was enacted on 2 July 2013 from 1 April 2015. The future 1% main tax rate
reductions are not expected to have a material impact on the financial statements.
116
Overview
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Financial and
other information
Governance
27. Provisions
2014
m
2013
m
Leased aircraft maintenance

Restructuring
72.7
4.5
77.2
54.1
6.6
60.7
Current
Non-current
45.3
31.9
77.2
26.9
33.8
60.7
Restructuring
(note 7)
m
Total
m
The Groups provisions are as follows:

Leased
aircraft
maintenance
m
At 1 April 2013
Additional provision in the year
Utilisation of provision
At 31 March 2014
54.1
40.4
(21.8)
72.7
6.6
10.7
(12.8)
4.5
60.7
51.1
(34.6)
77.2
Aircraft maintenance provisions are made in respect of contractual obligations to maintain aircraft under
operating lease contracts. The amount and timing of the maintenance costs are dependent on future usage
of the relevant aircraft. Typically this will be utilised within two years. The additional provision in the year
is included within maintenance charges shown in the consolidated income statement.
On 23 January 2013 and 23 May 2013, the Group announced Phases 1 and 2 of its Turnaround Plan to return
the Group to profitability. An Immediate Action plan was also announced on 11 November 2013. A specific
restructuring provision is therefore in place for direct restructuring expenditure and not associated with
the ongoing activities of the Group. This provision is expected to be utilised in the current financial year.
28. Share capital
Issued and fully paid

216,654,801 ordinary shares of 1p each (2013: 75,152,881)
2014
000
2013
000
2,167
752
The Company has one class of ordinary shares which carry no right to fixed income.
On 12 March 2014, 141,501,920 ordinary shares of 1 pence each were issued for gross cash consideration
of 155.7m in a firm placing and placing and open offer of these additional shares.
29. Share premium

m
Balance at 1 April 2012 and 31 March 2013

Premium arising on issue of equity shares
Expenses on issue of equity shares
60.6
154.2
(5.6)
209.2
117

Continued
30. Retained deficit

m

Net loss for the year
Other comprehensive income arising from measurement of defined benefit obligation 1
Credit to equity for equity-settled share-based payments
Net profit for the year
Other comprehensive loss arising from measurement of defined benefit obligation
net of deferred tax 1
Credit to equity for equity-settled share-based payments
(4.6)
(42.2)
0.2
0.6
(46.0)
8.0
(1.7)
0.6
(39.1)
31. Contingencies
The Group has entered into arrangements to guarantee the Groups credit card arrangements and has placed
bonds in favour of various aircraft lessors, handling agents, fuel suppliers and customs offices as follows:
2014
m
2013
m
Credit card arrangements

Bonds
Total
24.0
7.2
31.2
14.0
8.7
22.7
Cash deposited to secure the above arrangements as other restricted cash (note 20)
31.2
22.7
Since 31 March 2014, there has been a net reduction of 10.6m in restricted cash, comprising the full release of
7.0m of collateral on bonds and a net reduction of 4.0m in amounts required to secure card acquiring facilities.
Flybe Group plc and Finnair Oyj entered into a guarantee to secure the overdraft obligations of Flybe Finland Oy
to Nordea Bank Finland Plc in February 2012. Flybe Group plc has entered into an undertaking to provide a general
guarantee limited in value to 60.0% of the aggregate liability of Flybe Finland Oy to a maximum amount of 3m.
32. Operating lease arrangements
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Property and equipment
Less than one year

Between one and two years
Between two and five years
More than five years
The majority of aircraft operating leases are denominated in US Dollars.
118
Aircraft
2014
m
2013
m
2014
m
2013
m
0.9
0.6
1.7
9.4
12.6
2.9
1.1
2.5
9.9
16.4
80.1
73.2
172.7
77.1
403.1
85.1
78.1
196.1
108.6
467.9
Overview
Strategic report
Governance
Financial and
other information
33. Capital commitments
The Group has, over time, contractually committed to the acquisition of aircraft with a total list price before
escalations and discounts as follows:
Embraer E-Series aircraft
2014
m
2013
m
534.9
636.2
It is intended that these aircraft will be financed partly though cash flow and partly through external financing
and leasing arrangements. 24 aircraft were covered by these arrangements at 31 March 2014 (2013: 26).
An agreement was reached with Embraer in May 2013 to defer 16 new E175 aircraft due for delivery in 2014 and
2015. These aircraft will now not be delivered until 2017 to 2019. The next aircraft is contracted to be delivered
in October 2017.
34. Share-based payments
Long-Term Incentive Plan (LTIP)

The Flybe LTIP 2013
All employees of the Group may be granted Flybe LTIP 2013 Awards (LTIP Award). No Directors of the Company
may be granted an LTIP Award under this scheme.
Awards granted take the form of a conditional right to receive a cash amount, the value of which is calculated
by reference to the number of ordinary shares which are notionally subject to an LTIP Award multiplied by the
increase in the market value of an ordinary share between the date of grant (unless determined otherwise by the
remuneration committee) and the market value of an ordinary share on the third anniversary of grant. Market
value on a particular date will be calculated by reference to an average of the closing price of an ordinary share
for the three months prior to such date. The closing price at the third anniversary of the grant date in respect of
an LTIP Award may not exceed 400 per cent. of the opening price and therefore will be capped at the amount
equal to 400 per cent. of the opening price.
The vesting of LTIP Awards granted will be conditional upon the achievement of an objective performance target
set at the time of grant. It is intended that the performance target will be that the closing price in respect of an
LTIP Award at the first vesting date must exceed a pre-determined level.
2014
Number
of share
awards
Granted and outstanding at the end of the year

Exercisable at the end of the year
Weighted
average
exercise
price
()
2,751,951
On 21 November 2013, 2,751,951 shares were awarded. Fair value of the award at 31 March 2014 has been
calculated using a Monte Carlo valuation model. The inputs into the valuation are as follows:
2014
78.5p
131.5p
0.97%
45%
nil
Exercise price
Share price at 31 March 2014 (the measurement date)
Risk-free rate of interest
Flybe volatility
Dividend yield
As participation is limited to a small population, no forfeiture risk has been assumed in the valuation.
The charge for the year in relation to this scheme was 0.1m. The Group has recorded liabilities of 0.1m
at 31 March 2014.
119

Continued
34. Share-based payments continued
Long-Term Incentive Plan (LTIP) continued

The Saad Hammad LTIP (SH Plan)
Mr. Hammad is the sole participant under the SH Plan, which is specifically designed in order to incentivise him
to grow the market capitalisation of the Company over a three-year performance period commencing on the
date that he joined the Company.
The award made under the terms of the SH Plan entitles Mr. Hammad to receive a cash payment depending
upon the extent to which the performance conditions have been satisfied, over a three-year performance
period commencing on the date that he joined the Company. The performance condition is that the market
capitalisation of the Company at the end of the performance period must be greater than the market
capitalisation of the Company at the start of the performance period. If this condition is not satisfied,
no payment will be made. See the Directors Remuneration Report pages 78 and 79 for further details.
The LTIP award was granted on 1 August 2013. Fair value of the award at 31 March 2014 has been calculated
using a Monte Carlo valuation model. The inputs into the valuation are as follows:
2014
39.5m
75.2m
216.7m
131.5p
155.7m
0.85%
45%
nil
Starting market capitalisation

Starting issued share capital
Issued share capital at 31 March 2014 (the measurement date)
Share price at 31 March 2014 (the measurement date)
Aggregate price paid for new shares
Risk-free rate of interest
Flybe volatility
Dividend yield
As participation is limited to one individual, no forfeiture risk has been assumed in the valuation.
The charge for the year in relation to this scheme was 0.8m. The Group has recorded liabilities of 0.8m
at 31 March 2014.
Performance Share Plan (PSP)
The Company has a share award scheme under which all employees of the Group may be granted awards.
Awards are exercisable at nil consideration. The vesting period is three years and awards are forfeited if the
employee leaves the Group before the awards vest.
The vesting of these awards is subject to the performance of Flybe over a three-year period. 70% of the award
is subject to a target based on the Companys earnings per share (EPS) at the end of the performance period
and 30% of the award will be subject to Flybes total shareholder return (TSR) relative to a comparator group.
The comparator group comprises a number of European airlines and other regional transport companies,
as set out in the Directors Remuneration Report on page 78.
2014
Number
of share
awards
Outstanding at beginning of year

Expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
120
2,733,320
(929,595)
1,803,725
2013
Weighted
average
exercise
price
()
Number
of share
awards
Weighted
average
exercise
price
()
2,733,320
2,733,320
Overview
Strategic report
Governance
Financial and
other information
January 2011 award

On 21 January 2011, 937,146 shares were awarded. The share price on the date of the award was 3.25.
7,551 share options were forfeited in the year ended 31 March 2012. No share options have been forfeited
in this or the preceding financial year. The share award was available for exercise on 21 January 2014.
However based on performance over the period to 31 March 2014, these awards did not vest and the
929,595 awards expired.
The likelihood of awards being made under the January 2011 issue under the PSP was re-assessed during
the year ended 31 March 2012 and it was determined that the EPS element (70% of the total award) was
no longer expected to vest. The market conditions have not changed and therefore the charge for the
TSR element of this award for the year was 0.1m (2013: 0.2m).
August 2011 award
On 5 August 2011, a further 1,803,725 shares were awarded. The share price at the date of the award was 1.62.
No shares were forfeited or exercised during this year or the preceding financial year. The options outstanding
at 31 March 2014 had a weighted average exercise price of nil and will be available for exercise on 5 August 2014.
Based on performance over the period to 31 March 2014, these awards will not vest and will lapse in full.
Again it was determined that the EPS element (70% of the total award) of the August 2011 issue would not
be likely to vest and therefore only the TSR element would be charged to the income statement. The market
conditions have not changed and therefore the charge for the TSR element of this award for the year
was 0.1m (2013: less than 0.1m).
Share Incentive Plan (SIP)
The SIP was open to all UK employees with at least 12 months service as at 15 December 2010. The 100 free
shares were allocated to all eligible employees and are held in the SIP trust for a period of three years. If during
the three-year holding period an individual ceases to be an employee or otherwise attempts to withdraw their
free shares from the SIP, the shares shall be forfeited.
On 24 January 2012, 280,000 ordinary shares were issued by the Company for this purpose. The calculation
of the charge is based on the market value at the date of allocation of 3.25 and under the assumption that
75% of shares issued will be redeemed in three years.
The charge for the year in relation to this scheme was 0.2m (2013: 0.2m). The charge in relation to this scheme
ceased in December 2013.
Save As You Earn (SAYE)
The Flybe Sharesave SAYE scheme was offered to all employees with a length of service more than 12 months at
30 June 2011 and provides for an employee to be granted an option when entering into a savings contract (SAYE
Contract). The eligible employees are able to save a regular sum each month for a three-year period of not less
than 5 and not more than 30. An option to acquire ordinary shares will be granted to each eligible employee
who entered into the SAYE Contract. On 5 August 2011, 998,362 of options over ordinary shares were issued
by the Company for this purpose.
2014
m
Outstanding at the beginning of the year

Forfeited during the year
Cancelled during the year
Expired
Outstanding at the end of the year
2013
m
732,716
998,362
(15,537)
(15,010)
(137,011) (250,636)
(109,887)
470,281
732,716
The Group recognised expenses of 0.2m in relation to this award in the year to 31 March 2014 (2013: 0.2m).
Summary
The Group recognised total expenses of 1.5m in relation to share-based payments in the year ended 31 March 2014
(2013: 0.6m). The Group has recorded total liabilities in respect of the LTIP schemes of 0.9m at 31 March 2014.
121

Continued
35. Employee benefits
Defined contribution schemes

The Group operates defined contribution retirement schemes for all qualifying employees in the United Kingdom.
The assets of the schemes are held separately from those of the Group in funds under the control of trustees.
The total cost charged to income of 6.6m (2013: 7.1m) represents contributions payable to these schemes
by the Group at rates specified in the rules of the plans.
Defined benefit scheme
The defined benefit scheme operated by the Group was acquired on 5 March 2007 as part of the acquisition
of BA Connect. The scheme was closed to contributions during that year and its members now contribute to the
Groups defined contribution scheme. The estimated amount of contributions expected to be paid to the scheme
during the current financial year is 0.5m. No asset was recognised at 31 March 2013 in respect of the net surplus
because the Group did not have sufficient certainty that any asset will eventually be realised. At 31 March 2014,
the net deficit has been recognised in the balance sheet.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation
was carried out at 31 March 2010. An actuarial valuation at 31 March 2013 is currently underway, but is not yet
complete. The present value of the defined benefit obligation, the related current service cost and past service
cost were measured using the projected unit credit method.
The Group has adopted IAS 19 (revised 2011) and the related consequential amendments have impacted
the accounting for the Groups defined benefit scheme, by replacing the interest cost and expected return
on plan assets with a new interest charge. These changes have been applied retrospectively to the
comparative disclosure.
The principal assumptions used for the purpose of the actuarial valuation were as follows:
Valuation at
Key assumptions used:

Discount rate
Expected rate of salary increases
Future pension increases
RPI inflation
2014
%
2013
%
4.6
n/a
3.6/2.4
3.4
4.6
n/a
3.6/2.4
3.4
The post-retirement mortality rate assumed at 31 March 2014 was based on the Small Area Population Statistics
(SAPS) tables with a minus one year age rating and the Continuous Mortality Investigation (CMI) 2009
1% long-term rate projections (2013: the mortality rate was also based on SAPS).
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
Assumption
Discount rate
Rate of inflation
Change in assumption
Increase by 0.1%
Increase by 0.1%
2014
m
2013
m
(2.9)
2.0
(2.5)
1.9
The amount included in the balance sheet arising from the Groups obligations in respect of its defined retirement
benefit scheme is as follows:
2014
m
Present value of defined benefit obligations

Fair value of scheme assets
Net (deficit)/surplus
Impact of asset ceiling1
Recognised net liability from defined benefit obligation
1
Due to the limit set out in paragraph 64 of IAS 19.
122
(132.3)
129.8
(2.5)
(2.5)
2013
m
(129.3)
130.8
1.5
(1.5)
Overview
Strategic report
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Financial and
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Amounts recognised in the consolidated income statement in respect of the defined benefit scheme are as follows:
2014
m
2013
(restated)
m
0.4
(0.1)
0.3
Administration costs
Net interest receivable (see note 9)
Charge to profit or loss before tax
0.3
(0.1)
0.2
Remeasurements recognised in the consolidated statement of comprehensive income are as follows:
2014
m
Return on scheme assets in excess of interest

Experience losses on liabilities
Losses arising from changes in financial assumptions
Change in effect of asset ceiling1
Total remeasurements
1
2013
(restated)
m
(1.5)
(2.2)
4.0
0.3
8.2
(7.8)
(0.2)
(0.2)
2014
m
2013
m
Due to the limit set out in paragraph 64 of IAS 19.
Movements in the present value of defined benefit obligations were as follows:
Opening defined benefit obligation

Interest cost
Benefits paid
Actuarial loss arising from changes in financial assumptions
Actuarial loss arising from experience adjustments
Closing defined benefit obligation
129.3
5.8
(5.0)
2.2
132.3
119.6
5.8
(3.9)
7.8
129.3
Movements in fair value of scheme assets were as follows:

2014
m
Opening fair value of scheme assets

Interest income
Benefits paid
Administration costs
Actuarial (loss)/gain on scheme assets
Closing fair value of scheme assets
130.8
5.9
(5.0)
(0.4)
(1.5)
129.8
2013
m
120.9
5.9
(3.9)
(0.3)
8.2
130.8
The analysis of the scheme assets and the return on those assets at the balance sheet date were as follows:
Fair value of assets

Equities
Bonds and gilts
Cash
Actual return on scheme assets
2014
m
2013
m
58.4
71.3
0.1
129.8
50.5
80.0
0.3
130.8
4.5%
4.5%
123

Continued
36. Financial instruments
Significant accounting policies

Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis
for measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements.
Categories of financial instruments
2014
Financial assets
Cash, cash equivalents and restricted cash
Loans and receivables:
Trade and other receivables
Derivative instruments in designated hedge
accounting relationships
Financial liabilities
Liabilities held at amortised cost:
Debt
Derivative instruments in designated hedge
accounting relationships
2013
Carrying
value
m
Fair
value
m
Carrying
value
m
Fair
value
m
218.4
218.4
54.7
54.7
98.9
98.9
90.2
90.2
0.4
0.4
5.7
5.7
(36.8)
(101.5)
(36.8)
(103.9)
(35.7)
(121.0)
(35.7)
(126.8)
(8.0)
(8.0)
(1.5)
(1.5)
Valuation techniques and assumptions applied for the purposes of measuring fair value
The fair values of financial assets and financial liabilities are determined as follows:
>>The
fair values of financial assets and financial liabilities with standard terms and conditions and traded
on active liquid markets are determined with reference to quoted market prices.
>>The
fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined
with generally accepted pricing models based on discounted cash flow analysis using prices from observable
current market transactions and dealer quotes for similar instruments.
>>The
fair values of derivative instruments are calculated using quoted prices. Where such prices are not available,
a discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments
for non-optional derivatives, and option pricing models for optional derivatives. Foreign currency forward
contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest
rates matching maturities of the contracts. Interest rate swaps are measured at the present value of future cash
flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.
Financial instruments recorded at fair value at 31 March 2014

Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1
to 3 based on the degree to which the fair value is observable:
>>Level
1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
assets or liabilities;
>>Level
2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
>>Level
3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
124
Overview
Strategic report
Governance
Financial and
other information
The following table provides an analysis of the Groups financial instruments, all of which are grouped into Level 2:
Foreign exchange derivatives

Fuel derivatives
At 31 March
2014
m
2013
m
(7.5)
(0.1)
(7.6)
5.1
(0.9)
4.2
Financial risk management objectives

The Group is exposed to financial risks in respect of:
>>liquidity
and management of working capital
>>foreign
currency
>>interest
rates
>>credit
risk
>>commodities.
A description of each risk, together with the policy for managing risk is given below. To manage these risks,
the Group uses various derivative financial instruments, including foreign currency forward contracts and
commodity contracts. These derivative financial instruments are generally held to maturity and are not actively
traded. The Group enters into these arrangements with the goal of hedging its operational and balance sheet,
income statements and cash flow risk. However, the Groups exposure to commodity price and currency
exchange fluctuations cannot be neutralised completely.
Liquidity and working capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns
while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital
structure of the Group consists of debt, which includes the borrowings (see note 24), cash and cash equivalents
(see note 20) and equity attributable to equity holders of the parent, comprising issued capital, reserves and
retained earnings as disclosed in the consolidated statement of changes in equity and notes 28 to 30.
Gearing ratio
The Groups board reviews the capital structure on a regular basis. As part of this review, the board considered
the cost of capital and the risks associated with each class of capital. The gearing ratio at the year-end
is as follows:
2014
m
2013
m
Debt
(101.5)
(121.0)
Cash, cash equivalents and restricted cash
218.4
54.7
Net cash/(debt)
116.9
(66.3)
Equity
194.1
48.1
Net debt to equity ratio
(60.2)%
137.8%
Debt is defined as long-term and short-term borrowings as detailed in note 24. Equity includes all capital and
reserves of the Group attributable to equity holders of the parent.
125

Continued
36. Financial instruments continued

Liquidity risk management
The Directors believe that the Group has adequate cash holdings to meet its short-term creditors as they fall due.
The Group also arranges to borrow funds in order to finance purchase of aircraft and engines. The following
table, which does not take into account the discounting of cash flows and includes forecast interest payments,
shows the contractual maturity of the Groups non-derivative financial instruments:
2014
Financial assets:
Cash, cash equivalents and
restricted cash (variable interest rates)
Financial liabilities:
Borrowings:
Variable interest rates
Fixed interest rates
2013
Financial assets:
Cash, cash equivalents and
restricted cash (variable interest rates)
Financial liabilities:
Borrowings:
Variable interest rates
Fixed interest rates
Weighted
average
effective
interest rate
%
Within
1 year
m
1-2 years
m
2-5 years
m
Over
5 years
m
Total
m
0.1
211.8
66.2
25.8
0.7
5.9
6.9
218.4
98.9
(36.8)
2.3
3.4
(8.4)
(2.0)
(11.4)
(1.8)
46.8
58.5
1.4
23.6
0.1
(35.7)
1.6
3.5
(18.0)
(1.5)
(10.6)
(1.5)
(25.0)
(1.2)
(36.8)
(54.1)
(98.9)
(5.0)
1.0
5.5
8.1
54.7
90.2
(38.8)
(2.7)
(53.6)
(0.1)
(35.7)
(121.0)
(5.8)
All financial assets and financial liabilities are non-interest bearing unless otherwise stated.
The following table, which is based on market pricing in place at the end of each reporting period, shows
the maturity of the Groups derivative financial instruments:
Within
1 year
m
2014
Net settled derivatives:
Fuel derivatives
Gross settled derivatives:
Foreign currency payments
2013
Net settled derivatives:
Fuel derivatives
Gross settled derivatives:
Foreign currency payments
126
(0.1)
(7.5)
(7.6)
(0.9)
5.1
4.2
Overview
Strategic report
Governance
Financial and
other information
Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, primarily the leasing and purchase
of aircraft, spare parts and fuel in US dollars. Hence, significant exposures to exchange rate fluctuations arise to
US dollars. In addition, certain sales and airport costs are incurred in Euros.
Exchange rate exposures are managed within approved parameters by entering into a series of foreign exchange
forward contracts. These contracts are used in conjunction with fuel derivatives to mitigate fuel procurement
price risk. In addition, foreign exchange forward contracts are matched to planned purchases of aircraft, spare
parts and lease costs. It is the policy of the Group to enter into forward foreign exchange contracts to cover
specific US dollar payments to cover up to 90% of the exposure generated.
The Group does not enter into significant Euro foreign exchange forward contracts as the Euro payment
exposure is largely, though not entirely, offset by Euro revenue receipts. There were no Euro contracts
at 31 March 2014 or 31 March 2013.
All Group companies mainly use US dollars foreign exchange derivative instruments. The following table
summarises the Groups derivative financial instruments that are used to mitigate the exposures described above:
At 31 March 2014
At 31 March 2013
Average
exchange
rate
$m
Foreign
currency
m
Contract
value
m
Fair value
of asset/
(liability)
m
$1.5801
$1.5702
233.1
233.2
147.5
148.5
(7.5)
5.1
It is estimated that a general strengthening/weakening of Sterling against the US Dollar and the Euro would
improve/(worsen) both the Groups result before tax and increase its equity by approximately:
Percentage increase
US Dollar (m)
Euro (m)
2014
2013
1%
1%
0.5
0.1
0.4
0.1
In addition to the above, Flybe will continue to be exposed to significant non-cash revaluation gains/(losses) on
its US Dollar denominated aircraft loans, which will be adjusted in arriving at the Groups underlying results.
127

Continued

Foreign currency risk management continued
The carrying value of the Groups foreign currency denominated non-derivative monetary assets and liabilities
at the balance sheet date is as follows:
Assets
Euro:
Restricted cash
Trade receivables
US Dollar:
Restricted cash
Trade receivables
Liabilities
Euro:
US Dollar:
Debt
2014
m
2013
m
6.1
0.9
4.3
5.0
1.0
3.1
0.8
12.9
1.4
26.4
1.2
15.3
1.6
27.2
(3.2)
(1.0)
(10.2)
(88.1)
(101.5)
(15.5)
(98.7)
(115.2)
Cash flow hedge effectiveness

The Group designates certain hedges of foreign exchange and fuel price risks on firm commitments as cash flow
hedges. At 31 March 2014, the Group has identified 86 (2013: 56) contracts for foreign exchange purchases and
70 (2013: 99) contracts for fuel purchases which have been designated as cash flow hedges. For these hedges
the changes in the fair value of the financial instrument were compared to market movement in the underlying
hedged item and were found to be an effective offset. As a result a decrease in the fair value of these financial
derivative instruments of 10.4m (2013: increase 0.9m) was taken to equity through the hedging reserve.
Interest rate risk management
The Group is exposed to interest rate risk as the Group borrows funds in order to finance the purchase
of aircraft and engines at both fixed and floating interest rates. The risk is managed by the Group maintaining
an appropriate mix that varies from time-to-time between fixed and floating rate borrowings based on current
year conditions and debt levels.
The Groups exposure to interest rates in financial assets and financial liabilities is detailed in the liquidity risk
management section of this note.
It is estimated that a general increase/decrease in interest rates would (worsen)/improve the Groups result
before tax and (decrease)/increase its equity by approximately:
Percentage increase
Impact on profit/(loss) before tax and equity (m)
128
2014
2013
1%
(1.0)
1%
(1.2)
Overview
Strategic report
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Credit risk management

Disclosures in respect of credit risk management for trade and other receivables are provided in note 19.
The Group is exposed to credit risk arising from cash and deposits, derivative financial instruments and trade
and other receivables. The risk of loss of value due to a counterparty default is minimised by entering into
transactions with counterparties that have a minimum credit rating of A (or equivalent) as awarded by Moodys,
Fitch or Standard and Poors. In addition, counterparties with a credit rating of B or above can be used provided
the exposure to that institution does not exceed 5.0m.
The maximum exposure to credit risk is all financial assets plus any financial guarantees.
Commodity price risk management

The Group purchases fuel on the open market from recognised fuel suppliers in order to operate its fleet
of aircraft and this constitutes a substantial portion of the Groups activities (approximately 20.0% and 19.9%
of Flybe UK segment costs in the years ended 31 March 2014 and 2013 respectively). The Group engages in fuel
price hedging and foreign exchange transactions from time-to-time to meet its policy of entering into forward
fuel price exchange contracts and other related financial instruments to cover a significant percentage
of its anticipated requirements for fuel over a 12 month period.
Aviation fuel is a significant variable cost which has had a material impact on the Groups results during the
period under review. A variety of external factors, such as changes in supply and demand for oil and oil-related
products and the increasing role of speculators and funds in the futures markets, have played their part in making
aviation fuel prices highly volatile. It is fuel price volatility which is the main driver of variances in the Groups
overall fuel costs.
The Group operates a policy during normal trading conditions of managing this volatility by entering into
derivative contracts representing a portion of its aviation fuel requirements up to 24 months forward.
The actual amount covered by such contracts, amounted to 71.7% of the following years budgeted fuel
consumption as at 31 March 2014 (2013: 63.2%). The amount of fuel actually consumed was 6.1% less than
anticipated for the year ended 31 March 2014 (2013: 4.6% less than anticipated).
The Group is required to offset its carbon footprint by purchasing carbon allowances for submission to the EU
on an annual basis. The amount of allowances required to be submitted is based upon the fuel burned on all
flights departing and arriving into the EU. The Group seeks to minimise its exposure to fluctuating carbon prices
by entering into swap derivative contracts or by purchasing the permits as required in order to remain compliant
with EU regulations.
The actual number of emissions credits purchased for calendar year 2013 amounted to 555.9 tonnes, including
free allowances of 259.8 tonnes, at an average cost of 4.00.
Carbon emissions requirements for calendar year 2014 currently are expected to amount to 494.8 tonnes,
including free allowances of 259.8 tonnes. So far the Group has purchased 99% of its requirement for 2014
at an average cost of 5.52.
The following table details the fair values of forward fuel price contracts outstanding at each balance sheet date:
Fair value of contracts to buy fuel expiring

In less than 3 months
Between 3 and 6 months
Between 6 and 12 months
2014
m
2013
m
0.1
(0.2)
(0.1)
(0.6)
(0.2)
(0.1)
(0.9)
129

Continued

Commodity price risk management continued
The highs and lows recorded in each period for jet fuel prices were as follows:
2014
Price
per tonne
US$
High
1,047
Low
883
2013
Date
29 Aug
2013
01 May
2013
Price
per tonne
US$
1,116
862
Date
3 Apr
2012
25 Jun
2012
The Group uses fuel derivatives to mitigate those exposures. It is estimated that an increase in the market
price of aviation fuel would increase/(decrease) both the Groups profit/(loss) before tax and decrease its equity
by approximately:
Percentage increase in cost of fuel

Impact on profit/(loss) before tax and equity (m)
2014
2013
10%
(4.8)
10%
(3.3)
37. Related parties
At 31 March 2013, the Group was 48.1% (unchanged from 2012) owned by Rosedale Aviation Holdings Limited,
incorporated in Jersey. Rosedale Aviation Holdings Limited sold all its shares on 12 November 2013.
Group companies entered into the following transactions with related parties which are not members of the Group:
Sales of services
Preston Travel (CI) Limited 1

Flybe Finland Oy
2014
m
2013
m
1.2
4.0
1.1
5.5
Period until 12 November 2013 when Rosedale Aviation Holdings Limited ceased to be a related party.
Amounts owed by related parties
Preston Travel (CI) Limited 1

Flybe Finland Oy
2014
m
2013
m
0.3
0.6
0.4
0.5
As at 12 November 2013 when Rosedale Aviation Holdings Limited ceased to be a related party.

The Group provided services to Preston Travel (CI) Limited which, together with Rosedale Aviation Holdings
Limited, is a subsidiary of Rosedale (J.W.) Investments Limited.
The Group also provided services to its 60.0% owned operation, Flybe Finland. At 31 March 2014, 2.7m
(2013:6.3m) was owed in respect of revenue collected on behalf of Flybe Finland.
130
Overview
Strategic report
Governance
Financial and
other information
See note 31 for details of the arrangements supporting Flybe Finland Oys overdraft via a guarantee provided by
the Group.
Purchases of services
Edenfield Investments Limited

Downham Properties Limited
20141
m
2013
m
0.2
0.2
0.4
0.4
Period until 12 November 2013 when Rosedale Aviation Holdings Limited ceased to be a related party.
No amounts were owed to related parties at 12 November 2013 (when Edenfield Investments Limited and
Downham Properties Limited ceased to be related parties) or at 31 March 2013.
The transactions with Edenfield Investments Limited and Downham Properties Limited are disclosed although
there is no holding or subsidiary company relationship between these two companies and Rosedale Aviation
Holdings Limited. These two companies are owned and controlled by the EJ Walker 1964 settlement, established
by the former wife of the late Mr Jack Walker; this trust is separate for tax purposes from the Jack Walker
Settlement which controls Rosedale Aviation Holdings Limited. The Group also purchased property services
from Edenfield Investments Limited and from Downham Properties Limited.
Transactions with key management personnel
Directors of the Company and their immediate relatives control approximately 0.4% of the voting shares of the
Company (2013: 6.9%).
The remuneration of the Directors, who are the key management personnel of the Group, is set out below.
Further information about the remuneration of individual Directors is provided in the audited part of the
Directors Remuneration Report and form part of these audited financial statements.
Key management emoluments

Company contributions to personal pension schemes
Exit payments
2014
m
2013
m
1.8
0.2
0.7
2.7
1.9
0.2
2.1
Exit payments were made to former Directors as described further in Directors remuneration on page 79
and include 0.1m of company contributions to personal pension schemes. A further 0.4m is due to be paid
in2014/15.
A subsidiary of the Group has the following outstanding loans due from Directors and former Directors, made
prior to their appointment as Directors, to enable them to acquire a beneficial interest in shares in Flybe Group
plc (Mike Rutter repaid his loan on 27 March 2014):
Mike Rutter
Andrew Knuckey
2014
000
2013
000
20
63
20
131

Continued
37. Related parties continued
Transactions with key management personnel continued

In addition, the following Directors and former Directors have received loans from the Groups then immediate
parent company, Rosedale Aviation Holdings Limited, to enable them to acquire an interest in shares in Flybe
Group plc:
Andrew Knuckey
Andrew Strong 2
David Longbottom
Charlie Scott
Alan Smith
Peter Smith 2
12 November
2013 1
000
31 March
2013
000
134
36
9
9
9
9
134
36
9
9
9
9
The date at which Rosedale Aviation Holdings Limited ceased to be a related party.
Former Directors.
The loans made by the Group and Rosedale Aviation Holdings Limited total 289,000 at 12 November 2013
(31March 2013: 289,000). These loans bear no interest and are repayable out of the proceeds receivable by
each Director from a subsequent sale of his respective ordinary shares and at the discretion of Rosedale Aviation
Holdings Limited.
There are no other transactions or balances with key management.
132
Overview
Strategic report
Governance
Financial and
other information
Company balance sheet

At 31 March 2014
Non-current assets
Investments in subsidiaries
Current assets
Other receivables
Total assets
Current liabilities
Non-current assets
Liability for share-based payments
Total liabilities
Net assets
Equity attributable to owners of the company
Share capital
Share premium account
Merger reserve
Capital redemption reserve
Retained earnings
Total equity
Note
2014
m
2013
m
39
63.6
33.2
40
189.3
252.9
14.9
48.1
41
(0.5)
34
(0.9)
(1.4)
251.5
48.1
42
42
2.2
209.2
6.7
22.5
10.9
251.5
0.7
60.6
6.7
22.5
(42.4)
48.1
The financial statements of Flybe Group plc, registered number 1373432, were approved by the Board of Directors
and authorised for issue on 10 June 2014.
Signed on behalf of the Board of Directors.
Saad Hammad
Andrew Knuckey
Director Director
133
Company statement of changes in equity


Loss for the year
Profit for the year
Share capital issued
Share issue expenses
Share
capital
m
Share
premium
m
Merger
reserve
m
Capital
redemption
reserves
m
Retained
earnings/
(deficit)
m
0.7
60.6
6.7
22.5
0.3
(43.3)
90.8
(43.3)
0.7
1.5
60.6
154.2
(5.6)
6.7
22.5
0.6
(42.4)
52.7
0.6
48.1
52.7
155.7
(5.6)
6.7
22.5
0.6
10.9
0.6
251.5
2014
m
2013
m
2.2
209.2
Total
equity
m
Company cash flow statement

Operating profit
Dividends received from subsidiaries
Impairment of investments in subsidiaries
Reversal of provision for doubtful debts on inter-company balances
Credit to equity for share-based payments
Increase in receivables
Increase in payables
Increase in employee benefits
Net cash flows from operating activities
19.0
(9.6)
43.3
0.6
(214.4)
0.5
0.9
(159.7)
0.6
(0.6)
Cash flows from investing activities

Impairment of investments in subsidiaries
Net cash flows from investing activities
9.6
9.6
Financing activities
New equity raised
Net cash raised from financing activities
150.1
150.1
Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at beginning and end of year
134
Overview
Strategic report
Governance
Financial and
other information
Notes to the Company financial statements
38. Significant accounting policies
The separate financial statements of the Company are presented as required by the Companies Act 2006.
As permitted by the Act, the separate financial statements have been prepared in accordance with International
Financial Reporting Standards adopted by the European Union.
The financial statements have been prepared on the historical cost basis. The principal accounting policies
are the same as those set out in note 3 to the consolidated financial statements except as noted below.
In accordance with section 408 of the Companies Act 2006, the Company is exempt from the requirement
to present its own income statement. The Companys profit for the year was 52.7m (2013: loss of 43.3m).
39. Subsidiaries and related companies

m
Cost of investment
At 1 April 2012 and 31 March 2013
Capitalisation of inter-company balances into investments
At 31 March 2014
33.2
40.0
73.2
Provision for impairment

Impairment
At 31 March 2014
(9.6)
(9.6)
Net book value

At 31 March 2014
33.2
63.6
The inter-company balances with Flybe Limited and Westcountry Aircraft Servicing Limited have been capitalised
by way of loan releases to the value of 40.0m and 11,000 respectively. The investment in British Regional
Air Lines Group Limited has been written down by 9.6m.
135
Notes to the Company financial statements

Continued
Details of the Groups subsidiaries and related companies at 31 March 2014 are as follows:
Place of incorporation
and operation
Flybe Limited
British European Limited1
Irish European Limited1
British European.com Limited1
Walker Aviation Leasing (UK) Limited
British Regional Air Lines Group Limited
British Regional Airlines Limited1
Flybe Leasing Limited1
Flybe (IoM) Limited1
Flybe Holdings Limited
British European Airlines Limited1
Flybe Ireland Limited1
Guide Leasing Limited
Flybe Ireland Limited1
JEA Engineering (UK) Limited
Westcountry Aircraft Servicing Limited
Deutsche European Limited
BEA.com Limited
British European Air Limited
Flybe.com Limited
Jersey European Airways (UK) Limited
Walker Aviation Limited
Jersey European Airways Limited
Flybe Nordic AB1
Flybe Finland Holdings Oy1
Flybe Finland Oy1
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Isle of Man
Great Britain
Great Britain
Ireland
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Great Britain
Jersey
Sweden
Finland
Finland
Proportion of
ownership
interest
%
Proportion of
voting power
held
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
60
60
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
60
60
Indirectly held by Flybe Group plc.
Fastnet Aviation 1 Limited, a company registered in Ireland, was established during the previous financial
year as part of the process of obtaining financing for the pre-delivery deposits for the aircraft ordered from
Embraer. It is 100% owned by an independent corporate trustee that is unrelated to either the Group or the
financing company.
40. Other receivables
Amounts due from Group undertakings

Amounts due from Group undertakings after provision for doubtful debts are 189.3m (2013: 14.9m).
The carrying amount of trade and other receivables approximates to their fair value.
The allowance for doubtful debts arises from inter-company balances that are not viewed as recoverable.
A provision for doubtful debts for inter-company balances of 43.3m was released during the year
to 31 March 2014 (2013: provision for doubtful debts of 43.3m). All receivables that are not provided
are not yet due at both 31 March 2014 and 2013.
136
Overview
Strategic report
Governance
Financial and
other information
41. Trade and other payables
Accruals
Accruals of 0.5m (2013: nil) comprise amounts outstanding for trade purchases and ongoing costs.
The carrying amount of trade payables approximates to their fair value.
42. Share capital and share premium account
This is disclosed in notes 28 and 29 in the consolidated financial statements.
43. Related parties
The Company has provided cross-guarantee arrangements to its operating subsidiaries in the following areas:
>>suppliers
of fuel and other services to the principal operating company
>>operating
lease and loan repayments for aircraft used in the business
>>derivative
instruments used to secure fuel and foreign exchange purchases
Based on expectations at the end of the reporting period, the Company considers that it is more likely
than not that no amount will be payable under these arrangements.
The maximum amount that the Company could be forced to settle under the above arrangements is 524.4m
(2013: 614.6m).
137
Five-year summary
Financial measures
Less: Joint venture revenue
Group revenue
EBITDAR1
Operating profit/(loss) 2
Profit/(loss) before tax2
Earnings/(loss) per share (basic)
Aircraft (at net book value)
Net (debt)/funds
Operating cash flow before restructuring
Operating measures3
Average number of operating aircraft
Scheduled sectors flown
Scheduled seats flown
Scheduled sold passengers
Passenger yield
Scheduled load factor
1
2010
m
2011
m
570.5
570.5
595.5
595.5
108.1
27.6
24.6
42.4p
113.5
(21.4)
2012
m
2013
m
678.8
(63.5)
615.3
781.5
(167.2)
614.3
868.4
(247.9)
620.5
85.8
(4.9)
(6.8)
55.5
(34.6)
(41.1)
98.7
0.8
8.1
6.4p
(8.5)p
(56.0)p
9.6p
110.9
21.9
136.9
(29.7)
140.4
(66.3)
147.0
116.9
87.2
(0.9)
(4.3)
14.9
18.1
3.0
(1.6)
7.3
2010
2011
2012
2013
2014
67.5
68.3
61.3
59.9
56.6
135,100
138,200
137,400
132,600 130,200
11,304,400 11,620,600 11,610,400 11,298,200 11,144,400
7,178,000 7,166,200 7,325,200 7,245,100 7,742,100
72.55
76.15
77.21
76.16
71.55
63.5%
61.7%
63.1%
64.1%
69.5%
EBITDAR redefined to be profit/(loss) before tax after adding back net finance costs, taxation, depreciation, amortisation
and aircraft rental costs.
2
2012/13 and 2011/12 have been restated for changes to IAS 19 (revised 2011) Employee Benefits. The financial periods prior
to 2011/12 have not been restated.
3
Operating measures are stated for Flybe UK, and so do not include the impact of the joint venture, Flybe Finland.
138
2014
m
Overview
Strategic report
Governance
Financial and
other information
Glossary
Air Operators Certificate (AOC)

an air operators certificate issued by the national regulator
the Civil Aviation Authority in the UK and the Transport
Safety Agency, Trafi, in Finland
IPO
the admission, through an Initial Public Offering, of the
Companys shares to the Official List of the London Stock
Exchange on 15 December 2010
Air Passenger Duty (APD)

an excise duty which is charged by the UK and other
governments on the carriage of passengers flying from
an airport within that governments territory
load factor
the number of seats sold divided by seat capacity
(and flown load factor, the number of seats flown divided
by seat capacity)
BTECs
vocational awards formerly issued by the Business and
Technology Education Council and now issued by Edexcel
MRO
maintenance, repair and overhaul
Civil Aviation Authority (CAA)

the civil aviation regulatory authority of the UK, Channel
Islands and the Isle of Man
codeshare
an arrangement whereby multiple airlines sell seats on the
same flights and multiple flight designators and flight
numbers are used for the same flight
contract flying
a leasing agreement whereby an aircraft (together with
its operating crew), maintenance, support and insurance
are provided from one party to another, otherwise known
as an ACMI agreement
domestic
passengers from one UK airport (including the Channel
Islands and the Isle of Man) travelling to another UK airport
(including the Channel Islands and the Isle of Man)
eco-label rating
a rating, introduced by Flybe, concerning the measurement
of aircraft performance in respect of noise and greenhouse
gas emissions, during operation
effective exchange rate
the cost of currency for a period implicit through the
weighted average cost of (i) currency acquired through
forward contracts and (ii) currency bought in the spot
markets
EASA
European Aviation Safety Agency
ETS
Emissions Trading Scheme
Flybe Finland
Flybe Finland Oy (formerly Finnish Commuter Airlines Oy)
of which 60% is owned by Flybe and 40% by Finnair Oyj
Flybe Nordic AB
joint venture between Flybe and Finnair Oyj incorporating
Flybe Finland Oy
Fuel burn per seat
jet kerosene used, divided by number of seats flown
GHG
greenhouse gas
GWP
global warming potential
IATA
International Air Transport Association
passenger
a person with an issued ticket where the ticket has charged
a fare and/or a passenger surcharge and tax (if applicable)
passenger yield
total passenger revenue per passenger (after the deduction
of government taxes and levies)
passenger revenue per seat
passenger revenue generated divided by seat capacity
purchase rights
the right to purchase additional aircraft under the same
terms and conditions as for firm and option aircraft.
Such rights to be exercised within a finite time
regional aircraft
turboprop aircraft and regional jets of 120 seats or less
regional airline
an airline that flies predominantly regional aircraft
regional branded airline
a regional airline flying aircraft under its own name and
colours
regional UK
an airport or destination in the UK (including the Channel
Islands and the Isle of Man) but excluding London
Rosedale
Rosedale Aviation Holdings Limited
route
a scheduled service flown by an airline other than any
franchise route
scheduled sectors flown
the total number of aircraft flights per annum, excluding
positioning, charter and training flights
seat capacity
the number of seats per aircraft multiplied by the number
of scheduled sectors flown
sector
a flight between an originating airport and a destination
airport, typically with no intervening stops
slot
an authorisation to arrive at or depart from a stand at
a particular airport at a specific time on a particular day
summer season
the last Sunday in March until the last Saturday in October
in any particular year
139
Glossary
Continued
tCO2 e
the number of tonnes of carbon dioxide equivalent and is the
universal unit of measurement to indicate the global warming
potential (GWP) of each of the six specified greenhouse
gases, expressed in terms of the GWP of one unit of CO2
TRAFI
the civil aviation regulatory authority of Finland
UK domestic routes
routes where both the departure and destination airports
are within the United Kingdom, the Channel Islands or the
Isle of Man
under management
figures presented for revenue, passengers and seats flown
under management include both group and joint venture
activity, but exclude contract flying
white label
flying operated by Flybe on behalf of another airline, on
which Flybe takes cost and operational risk, but the revenue
risk remains with the airline for whom Flybe is operating
winter season
the last Sunday in October to the last Saturday in March
in any particular year
140
Flybe Group plc Annual Report 2014
transforming
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Flybe Group plc
Annual Report 2014
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108M
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Flybe Group plc Annual Report 2014

Total revenue under management2

Includes our franchise partner, Loganair.

Financial and other information

The Directors present the Annual

1 1.1% growth in Revenue under management

 .9% increase in passenger numbers

 620.5m of Group revenue (excluding joint

venture) up by 1.0% from 2012/13s 614.3m

 .4 ppts improvement in load factors

 ecord passenger numbers and load factors

of 41.1m improved performance in every

confidence in Flybes future

1 .8% improvement in Flybe UKs passenger

Delivering connectivity for

expanded Finnair joint venture operations

Flybe Group plc Annual Report and Accounts 2013/14

Introducing our new CEO

 he last few years have been difficult

First, I spotted in Flybe significant potential based

2013/14 has been a year

I could see that the alternative to a 90-minute flight

Flybe Group plc Annual Report and Accounts 2013/14

 lybe has emerged from its

What struck you on joining?

 y first impressions included

has an established brand with strong UK

was great momentum behind Phases 1 and 2

CEO gave me some very positive feedback

employees told me loudly and clearly that

my personal discussions and interactions

I wanted to build on these strengths. Hence the

You mentioned the challenges

The main challenges were to ensure the

To address these issues, I asked everyone in Flybe

Flybe Group plc Annual Report and Accounts 2013/14

Introducing our new CEO

While we are not yet operating at full potential and are

Flybe Group plc Annual Report and Accounts 2013/14

A significant part of our improved commercialisation

 013/14 has seen Flybe return

You have talked about the internal

The aviation industry is a vital part of the

On a global level, air travel demand looks set to

Firstly, emissions of greenhouse gases are a critical

Flybe Group plc Annual Report and Accounts 2013/14

Introducing our new CEO

Furthermore, the regime discriminates even further

Flybe Group plc Annual Report and Accounts 2013/14

What do you see as the key points

Our key task in 2014/15 is the full rebirth

First, a full brand re-launch with single-minded focus

It is about teamwork and One Flybe. It is about great

financially and operationally. We will continue to

Third, we are focused on removing burdensome fleet

As we move forward, we will be guided by our

Fourth, we will continue to build management

Transparency: open, upfront, authentic and sharing.

Fifth, we will continue to optimise current white label

In summary, I believe that overall we have reasonably

Flybe Group plc Annual Report and Accounts 2013/14

People have a persistent and growing desire

1 1.1% growth in Revenue under management

.9% increase in passenger numbers

620.5m of Group revenue (excluding joint

.4 ppts improvement in load factors

ecord passenger numbers and load factors

1 .8% improvement in Flybe UKs passenger

he last few years have been difficult

lybe has emerged from its

What struck you on joining?

y first impressions included

013/14 has seen Flybe return

Flybe has undergone great change

Flybe... relaunch, rebrand,

urnkey capacity solutions to national

Market leading, regional white

Flybe is already the largest regional white label

Regional market focus

Disciplined management process

2013/14 has seen the rebirth of Flybe.

Adjusted EBITDAR before restructuring defined as operating