Flybe hit turbulence today as writedowns and increased competition helped push it into the red.
The budget airline's reported loss before tax hit £19.9m for the year to the end of March after an IT debacle cost it £4.8m in writedowns.
Flybe anticipates further IT costs of around £6m in the 2017/18 financial year because of cancellation penalties on existing contracts.
However, the firm signalled an optimistic view of the year ahead with "significant progress" made in laying the foundations for future profitable growth, and Flybe's share price soared at the market open. Shares were up 6.74 per cent at 35.22p at the time of publishing.
Why it's interesting
In March, Flybe warned IT writedowns would hit its profit for the year, but a combination of factors played a role in the firm's swing to a loss.
Julie Palmer, partner at Begbies Traynor, said: “Flybe is still experiencing severe turbulence, reporting a sizeable loss for the full year after a combination of crippling IT costs, overcapacity, increased fare competition and industrial action dented its performance."
Flybe also suffered a loss when its finance chief, Philip de Klerk, said he would resign to take up a new job at another company.
The airline's shares have dropped nearly 40 per cent over the past year alone, Palmer said.
"However, with European airports recently reporting a 14 per cent increase in passenger traffic and analysts forecasting a more positive outlook for the air travel industry in 2017, Flybe will be hoping that its new alliance with Eastern Airways and these improved market conditions might mean clearer skies ahead."
What Flybe said
Christine Ourmieres-Widener, who took on the role of chief executive of Flybe in January, said:
"I am truly passionate about the airline industry and I see tremendous opportunities for Flybe to connect and engage with communities and to establish a reputation for excellence in serving our customers. We will be successful in delivering by continually focusing on our costs, increasing our knowledge about who our customers are and what makes them tick, achieving industry-leading operational excellence and implementing a great digital platform.
"Flybe has a great future as Europe's largest regional airline. My team is focused on delivering an exceptional customer experience and building value for shareholders."