Flybe Group PLC Annual Report FY 2015

continuing our
transformation
Flybe Group plc
Annual Report 2014/15
Total revenue m (excl. joint ventures) Reported profit before tax m Total cash m (at 31 March)
615.3 614.3 620.5 8.1 218.4
574.1 195.9
(6.8)
67.6
54.7
(35.6)
(41.1)
2011/12 2012/13 2013/14 2014/15 2011/12 2012/13 2013/14 2014/15 2012 2013 2014 2015
(35.6)m (25.4)m 16.6m

Reported loss before tax Adjusted loss before tax, Illustrative profit before tax,
including (12.0)m loss on excluding (10.2)m USD excluding (10.2)m USD loan
discontinued operations loan revaluation losses, revaluation losses, (26.0)m
associated with Finland JV, (2013/14: (0.1)m) E195 surplus costs, (4.0)m
(2013/14: 8.1m) EU261 catch up provision
and (12.0)m discontinued
operations (2013/14: 1.7m)
Strategic report 02 Financial and other information 80 See all our

Chairmans statement 02 Statement of Directors investor
Chief Executive Officers responsibilities80 information at
statement06 Independent auditors www.flybe.com/
Our business model 12 report to the members of corporate/
Our strategy and disciplines 14 Flybe Group plc 81 investors/
Business review 16 Consolidated income statement 86
Financial review 20 Consolidated statement of
Risks and uncertainties 28 comprehensive income 87
Corporate responsibility 32 Consolidated statement of
changes in equity 87
Governance41 Consolidated balance sheet 88
Chairmans statement on Consolidated cash flow The Directors present the Annual Report
corporate governance 41 statement89 and Accounts for the year ended 31 March
Board of Directors 42 Notes to the consolidated 2015. References to Flybe, the Group,
the Company, we or our are to
Corporate governance 46 financial statements 90 Flybe Group plc (registered number
Audit Committee report 54 Company balance sheet 125 1373432) and its subsidiary companies,
Directors report 58 Company statement of where appropriate. The Strategic Report
Directors remuneration 61 changes in equity 126 contains statements that are forward
looking. These statements are made by
Company cash flow statement 126 the Directors in good faith based on the
Notes to the Company information available to them up to the time
financial statements 127 of approval of this report. Such statements
should be treated with caution due to the
Five-year summary 129 inherent uncertainties and risk associated
Glossary130 with forward looking information.
iii Flybe Group plcAnnual Report and Accounts 2014/15

Overview
Load factor Passenger numbers m Passenger revenue per seat
75.2% 7.7 7.7 49.70 51.35
69.5% 7.3 7.2 48.71 48.84
63.1% 64.1%
2011/12 2012/13 2013/14 2014/15 2011/12 2012/13 2013/14 2014/15 2011/12 2012/13 2013/14 2014/15
Our ambition is to be the best

regional airline in Europe
We aim to do this by providing
time-saving and cost efficient
air access to the world for regional
customers, delivered punctually
with a smile.
Flybe Group plcAnnual Report and Accounts 2014/15 01

Chairmans statement
A year of good progress

We are working hard to continue delivering
on our turnaround strategy
Introduction
This has been another busy year. Saad Hammad, our
CEO, started the three-year turnaround when he joined
the business in August 2013. He developed a new
strategy for Flybe, which was presented to investors
in November 2013. At the heart of this was identifying
that Flybe could occupy a distinctive niche in regional
aviation. There is a need for relatively short flights (up
to around 90 minutes) from regional airports. Many
of these routes are too thin (i.e. they have too few
passengers) for the standard jet aircraft format, such
as an A320 or B737, and some use runways that are
too short for these aircraft to operate effectively. This
makes these routes less attractive to a flag-carrying
or low-cost airline. However, they are well suited to the
turboprop fleet of Flybe. As such, we play a vital part
in providing regional connectivity in the UK and to the
near continent.
Simon Laffin Delivering this new strategy required management to

Chairman deal with a number of legacy issues. Firstly, we needed
progressively to replace expensive E-Jets with more
economic turboprops, necessitating cancellation of
Our differentiated competitive focus, the USD892m forward order of E175 regional jets and
securing a replacement pipeline of Q400s. We wanted
reduced cost base, strong balance sheet also to divest our existing larger, even more expensive
and growth strategy give us confidence to run, E195 jets. We had to cut costs even further,
in delivering a good result this year both internally and with third party suppliers. We had
to improve the quality and depth of the management
and in driving sustainable growth into team. Unprofitable routes needed to be closed and
the future. new profitable routes identified.
Much progress has been made over the first complete

year of the turnaround. The bulk of the forward order
of jets has been passed onto another operator, and a
sufficient Q400 pipeline has been secured. Homes for
seven of the 14 E195s in the fleet have been secured.
Costs have been cut significantly, unprofitable routes
culled, new routes and bases opened, and new talent
recruited. There is more detail on all these activities
in the Chief Executive and financial reviews, but I can
report that the business is now fitter and better aligned
to our clear strategic objectives.
02 Flybe Group plcAnnual Report and Accounts 2014/15

Strategic report
5.7%
As I wrote last year, Air Passenger Duty (APD) is
levied disproportionately on regional flights. A typical
domestic flight can be charged five times the tax per
mile of a long-haul one. This is exacerbated when
Governance
Overall increase in load factor a return international flight suffers this charge once,
but a domestic one is taxed twice as APD is a UK
departure tax. Yet the last Government actually
However, it has proven very difficult to divest the reduced long-haul APD rates by 1 billion, while
seven remaining E195s, and their costs remain a informing Flybe that it could not afford to reduce
material drain on our profit for 2015/16. Management short-haul rates.
continues to work on ways to reduce or mitigate this
cost, by subleasing, White Label flying or management The European Union has brought in mandatory
contract. Most of our new routes have proven compensation (EU261) for flight delays of longer
successful with an overall increase in load factor than three hours caused by circumstances within the
of 5.7 percentage points across the network, although operators control. Whilst we agree that compensation
Financial statements
strong demand on some routes and competitive should be paid at such times, we believe that the
pressures on others, particularly to and from London compensation should be proportional to the price
City, have caused us to review some routes and paid for the ticket. Our average ticket price, excluding
frequencies, increasing some and reducing others. APD, is 60. To have to recompense a passenger who
This is a normal part of running an airline. is delayed for three hours by giving them a flat 250
(210) cash compensation, over three times what they
Low spot oil prices will reduce our costs in the future, originally paid, is excessive. This puts an unnecessary
but have not as yet, as we maintain a forward hedging additional cost on regional aviation.
on oil in order to shield the business from short-term
price fluctuations. Some other airlines that cannot The Government protests that EU legislation is not
afford to be as well hedged as Flybe have been their problem and they cannot control it. However,
Other information
reducing their prices and the resulting pressure diplomatic resolution of EU activities is a core
on margins has been reinforced by lower retail fuel responsibility of the UK Government. It cannot control
prices, which have reduced the cost of driving as the EU any more than we can control some technical
an alternative. problems arising in our aircraft.
The Board decided that a review of our turnaround The Government is therefore responsible for two
strategy was timely to check that it was still the very significant additional charges on aviation.
optimum one in the light of our experience gained The incoming administration has made a feature of
so far and the changing economic and competitive creating a Northern Powerhouse, yet again ignoring
environment. This was completed by management the importance of regional aviation connectivity.
during the year, as discussed in the Chief Executives The Government-funded HS2 will not be part of this,
review. The core strategy of Flybe providing branded, as it will not reach Manchester for the next 17 years.
scheduled regional aviation has been reinforced. Meanwhile, right now Flybe operates 41 flights from
The main change is to redouble our energies on Manchester and 46 from Birmingham every day
this core proposition, and to reduce the effort going and those 2m passengers a year face an arbitrary
into non-core activities. For example, we now regard tax burden.
White Label as an incremental rather than core activity.
Because we are regional, unlike most other airlines,

our main competition is largely road, rail and ferry.
80% of our routes (and 70% of our seat capacity)
do not have another airline competing. Regional
aviation is a crucial part of the UKs transport
infrastructure. It is an essential part of a modern
80%
thriving economy. This market, however, is tough.
Many regional airports are endangered, and, once
gone, will never be replaced. Profit margins are tight,
so costs need to be kept extremely tight. Meanwhile, Of our routes do not have
the government continues to focus its attention almost
solely on long-haul, London airports and the decision anotherairline competing
on a new South East runway.

Chairmans statement
continued
4
These changes mean that the entire Board will have
changed over the last two years. The new Board is very
focused on delivering value to shareholders from the
turnaround, and believe that Flybe, increasingly freed
New Board hires from legacy issues, can grow and prosper over the next
few years.
Board Annelie Carver joined as General Counsel and

Andrew Knuckey resigned in August 2013, but, being Company Secretary in June 2014, but sadly has
on a 12-month notice period, he served out this period decided to leave for personal reasons. A search for
as our Chief Finance Officer, leaving in August 2014. a successor is under way.
Whilst it is almost conventional wisdom these days
to decry such apparently long notice periods for Corporate governance
directors, the company and our shareholders benefited In line with the standards of best practice and
enormously in this case. It kept our Chief Finance regulations, we have made a separate statement
Officer in place through the period in which it took us on page 41.
to recruit a suitable replacement. I would like to thank
Andrew for bearing with us and continuing to be a loyal Results
employee through this period. Whilst the reported loss before tax has increased to
(35.6)m, this includes USD loan revaluation losses
Philip de Klerk did in fact join the Board as Chief of (10.2)m with an adjusted loss before tax of
Finance Officer in August last year. We are delighted (25.4)m. In addition, the adjusted loss includes
to have attracted such a high quality candidate. (4.0)m of catch-up provision of EU261 claims,
The fact that the search for him took us so long (12.0)m discontinued operations associated with
reflects our insistence on only recruiting the best. our divested Finland joint venture and E195 surplus
costs of (26.0)m. The Group used 30.1m operating
Liz McMeikan joined the Board in August 2014 and cash, principally due to surplus E195 costs leaving us
immediately took up the chair of the Remuneration with 195.9m total cash.
Committee. She has strong experience of Human
Resources and remuneration issues, backed with General outlook
considerable retail and consumer business experience. The general economic conditions are difficult, but
Sir Timo Anderson, former Director General of the UK we shall continue to drive lower costs and improve
Military Aviation Authority, joined the Board as a Non- the profitability of our route network. The annual
Executive Director in May 2014, and chairs the Flight surplus capacity costs of the legacy E195s will reduce
Safety Committee. He has brought great experience somewhat this year, but will nevertheless still be a drag
of aviation and air safety. David Kappler joined the on profit. The Board recognises that finding a solution
Board in March 2015. He has long years of experience for these is a key priority for this new financial year.
in consumer-facing businesses and the hotel industry,
as well as an executive career as CFO of Cadbury Flybe will continue to play a vital role in UK regional
Schweppes. David was appointed the Senior connectivity. The Board believes that our differentiated
Independent Director in April 2015, and will shortly competitive positioning, reduced cost base, strong
take over as chair of the Audit Committee after balance sheet and disciplined growth strategy will
the AGM. enable us to deliver continued progress in the current
year and position us well to drive sustainable profitable
Alan Smith and David Longbottom stepped down growth in the future.
from the Board in August last year. Charlie Scott has
announced his intention to retire at the AGM this year.
I should like to thank the departing Directors for their Simon Laffin
hard work and commitment over many years. Chairman

Strategic report
Welcome on board Board focus
Governance
Philip de Klerk The Board focuses on key tasks,
Joined the Board in August
which include receiving reports
2014 as Finance Director on health, safety and security,
business risks, long-term strategy,
the Groups trading performance,
Elizabeth McMeikan the work of its Committees and the
Joined the Board in August key actions of the Operating Board
2014 as the Chair of the and senior management.
Remuneration Committee
The Executive Directors review and
Sir Timo Anderson discuss with the Board all strategic
Joined the Board in May 2014 projects and all material matters
as Non-Executive Director currently or prospectively affecting
and Chair of the Flight Safety the Group and its performance.
Committee
To enable the Board to function
David Kappler effectively and to assist the
Directors to discharge their
Other information
Joined the Board in March
responsibilities, a comprehensive
2015 and was appointed
Senior Independent Director
set of papers is provided in
in April 2015 advance of each Board and
Committee meeting. These include
regular business progress reports,
Read more about the Board budgets, financial statements and
on pages 42 to 43 shareholder information.
The Board held nine scheduled
meetings during the year.
Flybe will continue to play a vital role in UK regional connectivity. The Board
believes that our differentiated competitive positioning, reduced cost base,
strong balance sheet and disciplined growth strategy will enable us to deliver
continued progress.

Chief Executive Officers statement
Strong progress on
our transformation
Fully focused on building a sustainably profitable
and scalable regional airline business
Introduction
We have just completed the first full financial year
of our three year transformation plan. Despite a more
challenging environment than anticipated, significant
progress has been made. There is much more to do,
but I am keen to put on record my thanks to all our
pilots, cabin crew, engineers and everyone in the field
and at HQ in Exeter for their commitment and effort.
Flybe is back on track to recovery and profitable
growth.
Turnaround Chapter 1: Restructuring

When I joined Flybe in August 2013, the cost reductions
already under way (the Phase 1 and 2 actions) were
a start but we needed to do more. We therefore
implemented a number of additional cash generation
and cost reduction measures to secure the future of
the Company.
Saad Hammad
Chief Executive Officer Turnaround Chapter 2: Rebirth of Flybe
We approached the capital markets in March 2014
and were able to successfully raise 150m in net
proceeds. This enabled us to re-launch our brand in
Flybe is back on track to recovery April 2014 with a clear focus on a distinctive customer
and profitable growth. proposition: time-saving and cost effective air access
to the world for regional customers, delivered
punctually with a smile. We adopted as our new
customer promise The fastest way from A to Flybe,
faster than rail and road, and aiming to be on-time,
every time. The brand re-launch involved new brand
livery with a more modern look and feel, the adoption
of purple as our brand colour, a new contemporary,
purple-themed cabin crew uniform, and a revitalised
on-board presentation as well as a reinvigorated
product and service offering.
The improvements we launched were designed

to reflect an exciting new era for Flybe, one with a
renewed commitment to delivering a great customer
experience. In the new Flybe, we adopted purple not

Strategic report
>>We have strengthened our balance
Use of proceeds of 150m
Governance
sheet, enhanced our marketing and
customer service and invested in our
branded expansion.
Balance sheet >>We have decided to expand less in
Working capital to strengthen the balance sheet White Label flying and continue to
invest in our systems and productivity.
Profitable growth
Branded scheduled commercial expansion >>We have used some of the funds to
White Label flying expansion deal with the legacy issues, especially
Reduce fleet ownership costs
the E195s (included within reduce fleet
ownership costs).
Improve productivity
Enhance service to customers
just as our new brand colour, but also as a signifier of In our core UK business, we made solid progress
a new set of behavioural norms within the organisation and improved performance. This has been done
designed to maximise individual, team and business by increasing route profitability and improving unit
performance. These Purple norms are captured by the revenue whilst decreasing unit costs.
5 Ps: People-focus, Performance-orientation, Passion,
Positivity and Playfulness. In 2014/15, we launched We decided to drive load factor performance
a structured engagement programme to induct all (delivering a 5.7ppt increase to a record 75.2%)
employees and business partners in The Purple Way. by yield investment. This, together with improved
Other information
marketing, drove up passenger revenue per seat
Turnaround Chapter 3: Resolving legacy issues by 3.3% over the prior year. We also discontinued a
and laying foundations for profitable growth number of underperforming routes and rationalised
Over the past 12 months, we have made significant frequencies. So although seat capacity fell by 7.6%,
headway in tackling Flybes legacy issues. We signed annual passenger volumes were maintained at 7.7m
a landmark deal with Bombardier to upgrade the and we sustained regional domestic sector leadership.
reliability of Flybes 45 Q400 aircraft. We exited, Our revenue development was also helped by new
without any penalties, the firm USD892m obligation codeshares with a number of long-haul carriers,
to buy additional E175 jets from Embraer and secured including, for example Cathay Pacific, as part of our
24 young, attractively priced turboprop Q400s. programme to provide a one-stop to the world service
Whilst we are making a one-off capital investment for customers based in the regions. It was also enabled
to make the Q400s compliant with European by a number of new commercial partnerships with,
regulatory requirements and Flybes own fleet amongst others, travel rewards provider, Avios, STA
standards, these aircraft were sourced at leasing Travel, the worlds largest student and youth travel
rates below what we pay on our existing Q400s. company and booking.com, the world leader in online
We also exited the loss making joint venture with accommodation booking.
Finnair. In addition, we found solutions for half of
the 14 surplus E195 jets and continue to look at We returned to growth in Q4 with a 15% increase
options to divest the remaining seven jets. in capacity, a 15% increase in passenger volumes and
an increase in over 5% in passenger revenue compared
Simultaneously with tackling Flybes legacy issues, to Q4 2013/14.
we launched a number of platforms for future
profitable growth. We launched two new bases, In addition to the passenger revenue per seat growth,
at Bournemouth and Aberdeen and 26 new routes. we succeeded in reducing cost per seat, excluding
We signed a six year agreement with SAS, surplus costs and historical EU261 provision by 2.7%
Scandinavias largest carrier, for a new regional in Flybe UK, despite one-off investments in marketing,
White Label programme at Stockholm initially with IT and people. This was made possible by a series of
four turboprop aircraft to start in the autumn of 2015. cost savings across the business, which resulted in a
We also signed an eight and a half year contract with gross benefit of 74m cumulatively over the last two
Airbus for airframe related maintenance, repair and years before reinvestments (during 2013/14 & 2014/15),
overhaul of the Royal Air Forces new fleet of 22 3m more than the target announced in November
A400M Atlas airlifters at Brize Norton. 2013. We also increased aircraft utilisation by 13%
over the prior year.

continued
We have made considerable progress, despite a mature and we expect a new one to be profitable from
number of adverse developments over the past the third year of operation. We intend to remain agile
year as well as a challenging and often uncertain whenever our environment changes rapidly around us.
macro-economic, regulatory and political backdrop.
Firstly, the UK Supreme Court ruled that passenger Turnaround Chapter 4: Profitable growth
compensation for technical delays under EU261 should Following a detailed review of our turnaround strategy
be paid for the prior six years. In addition, there was and progress to date, we have identified three priorities
margin pressure from the halving of fuel prices whilst for the next phase of our turnaround:
our fuel hedges were significantly above spot rates.
It is inevitable that yields would soften in these 1. Simplifying the business and resolving the
circumstances. Also, it proved to be more difficult than remaining seven E195s
we envisaged to divest the remaining E195 jets, and >>Divesting our joint venture in Finland has appreciably
their costs remain a material drain on our cash and
simplified our business and enabled us to focus our
profit. We are continuing to work on finding homes
efforts solely on Flybe UK. The loss making Finland
or productive uses for these remaining E195 aircraft.
joint venture required management resources to
Meanwhile, as mitigation, we are planning to fly three
support it in governance, operations, safety, HR,
of these aircraft throughout the new financial year as
finance, marketing and IT.
we have identified a number of routes where we can
earn a contribution to their costs. Finally, while most of >>We had originally identified White Label
our new routes have launched successfully, unforeseen development as a second engine of growth,
competitor developments and slower than anticipated but we have learned over the past 12 months that
consumer demand on a few new routes, particularly at adoption by mainstream airlines across Europe
London City, led us to redeploy capacity quickly to the will be slow due to political inertia. We will look
better performing routes. New routes do take time to to develop it further, but on an opportunistic rather
than a proactive basis for the time being.
Chapter 1 Chapter 2
Restructuring Rebirth of Flybe

>>Focus on additional cost reduction and >>Raised 150m net proceeds on 12 March 2014
cash generation measures, strengthening >>Re-launched our brand in April 2014
our commercial capability and driving
revenue growth
>>The purple Flybe new, invigorated culture

and ethos
>>22.5m restricted cash released
Saad Philip de
Hammad Klerk
joined in joined in
Aug 2013 Aug 2014
Jan 2013 March 2014 April 2014

Strategic report
>>We now plan to focus our efforts single-mindedly people to operate our routes effectively. We are
on our scheduled, branded flying business while a people business and it is only through focus
delivering a world-class White Label implementation on people that we can drive fundamental business
at SAS. improvements. A key area of focus alongside
Governance
>>To
induction of all employees in The Purple Way
maximise focus on our core UK business, we
by the end of Summer 2015, will be a vigorous
plan to resolve the remaining E195 aircraft.
programme to address crew lifestyle issues which
have arisen as a result of a return to rapid growth
2. E
nergising our organisation to drive
and network expansion.
profitable growth
>>Our strategy remains to serve regional customers 3. Securing the basics
punctually and cost-effectively on thin routes with In order to maximise success in the next phase of
a high frequency product predominantly via Q400 the turnaround. We will continue to improve:
turboprop aircraft, focused in the main on region >>Our network development and scheduling execution,
to city routes. We currently connect Britain through
as we continue to grow seat capacity and launch new
our regional network our vision is to connect regional
routes.
Europe. In the near term, this means more UK to
Europe connections especially via our hubs at >>The quality and depth of management. We have
Manchester and Birmingham. recently recruited a new Chief Operations Officer,
>>To
a new Head of Operations Planning, a new Head
ensure effective implementation of our strategy,
of Ground Operations, a new Head of the MRO
we will continue to optimise frequencies, discontinue
in Exeter, a new Head of IT and a new Group
poor performing routes and certain bases saddled
Financial Controller.
with unsustainable costs, and launch new routes and
bases with careful investment. We will mobilise our
Other information
Chapter 3 Chapter 4
Legacy issues resolved and foundations Profitable growth

for growth >>Resolveremaining
seven E195s
Legacy issues Foundations for future
>>Energiseorganisation to
>>Exit Embraer E175 deal >>Two new bases improve route profitability
>>Secured future Q400 fleet >>26 new routes >>Secure the basics
>>Exited Finland joint venture >>Record load factors
>>Found solutions for >>SAS White Label deal
seven E195s >>A400M maintenance deal
>>Resolve remaining seven E195s
26 new
routes
Jan 2015 April 2015 20152016

continued
>>Operational delivery including schedule reliability

and punctuality. Flybe was named top UK airline
for punctuality in a report issued by UK consumer
watchdog Which? in December 2014. We are keen
to build on this to ensure we consistently fly the
published schedule reliably and achieve 85%
on-time performance within 15 minutes of
scheduled arrival times.
>>Our back office processes and systems.
Summary
We have just completed a tough but encouraging
first full year of our three-year transformation plan.
We have demonstrated that the performance of our
core UK business is much stronger than a year ago.
I would like to give a huge thank you to all our staff.
We have made considerable headway in tackling
Flybes legacy issues. We remain committed to finding
as quickly as possible permanent and economically
sensible solutions to the seven remaining surplus
E195 jets. We are laying platforms for future growth.
In January 2015, we reviewed and refined the focus of
our turnaround strategy. Our focus going forward will
be on our branded, scheduled business, while delivering
a world-class White Label implementation at SAS.
The priorities in the next phase of our turnaround will
be to simplify the business and resolve the remaining
E195s, energise our people to drive improved route
profitability, and secure the basics in the business.
We have a huge opportunity to build a sustainably
profitable and scalable regional airline business.
The purple force is with us.
Viva Flybe!

Strategic report
Key Performance Indicators
Governance
The Key Performance Indicators below support our Strategy and enable us to focus
on improving the business moving forward. They are also early warning indicators
on the health and performance of our business.
Safety underpins Roll-out of Flybe Safety Promise, new safety training

everything we do programme, new safety reporting system and well
developed safety procedures are in place to generate
continuous improvement in safety performance.
Employee satisfaction Improvement in 55% employee engagement
score from 2014/15 survey.
Customer satisfaction Improvement in 55% customer satisfaction

score from 2014/15 survey.
Reliability Improve overall reliability of the fleet above

98.7% achieved in 2014/15.
Other information
On-time performance Deliver on-time performance of 85% within
15 minutes of scheduled arrival time.
Load factor Deliver minimum 70% load factor as

year-round average.
Revenue Deliver year-on-year improvement in

Revenue per Seat and overall revenue.
Cost Deliver a reduction in year-on-year Cost per Seat.

Find permanent and economically acceptable
solutions for surplus E195 aircraft.
Drive year-on-year improvement in aircraft utilisation.
EBITDAR Improve EBITDAR as a % of revenue.
ROCE Deliver ROCE in excess of cost of capital.
Cash Maintain a minimum total cash balance equivalent

to 10 weeks of cash operating costs.

Our business model
How we are different

We have a unique position as a regional airline,
supported by a strong brand and talented,
dedicated people
What we do
Flybe branded Flying thin Connecting Faster and

airline in UK regional routes, 7.7m regional cheaper than
and White unservable by customers road and rail,
Label regional mainstream which are
services for airlines with the principal
European flag larger aircraft alternatives
carriers and seat
capacity
Translates into time-saving access to the world from the regions
Value creation
Capital allocation Cost

>>Improved aircraft utilisation >>External spend drive
>>Targeted growth >>Unit cost performance
Revenue/customer >>Optimise productivity

>>Relentless customer focus Organisation
>>Route assessment model >>Purple safety
>>On-time performance >>Right people in right roles
>>Selective White Label development >>The Purple Way

Strategic report
How do we do it
Governance
Purple People Safe operations Right aircraft Neighbourhood
Purple is not just Safety underpins on the right airports, often
our brand colour, everything we do. routes with short
but also a new set Safety is everyones
of behavioural norms: personal responsibility. Smaller cheaper runways
professional, positive, turboprops enable The European
passionate, people- us to service routes regions are poorly
focused and playful. others cannot. served due to small
local airports.
We can help.
High High frequency Best in class Codeshares
punctuality, schedule White Label to maximise
good service We can offer more solution access to the
Flybe was named frequent flights as delivery outside world
top UK airline for we need to fill fewer
seats in our smaller We plan to be Additional codeshares
Other information
punctuality in a opportunistic provide a one-stop
report issued by turboprops.
with White Label to the world service
UK consumer whilst delivering for customers based
watchdog Which? excellent service in the regions.
in December 2014. to our partners.
Improved shareholder returns
Margin expansion Network development

Return to profitability and then build for sustainable Our goal of the right aircraft on the right routes
financial growth. along with connecting passengers from the regions.
Improved asset turn

Airlines are asset heavy industries with aircraft being
the main asset. Therefore aircraft utilisation is key.

Our strategy and disciplines
To be the best local

airline in Europe
We aim to do this by providing time-saving and
cost efficient air access to the world for regional
customers, delivered punctually with a smile
The four strategy drivers
Revenue growth Following a significant planned

reduction in capacity and revenue
(7.5%) in 2014/15, sustainable
profitable growth is a core priority.
Cost reduction Constant cost focus across the

board with particular attention
to the aircraft we operate and
the efficiencies we deliver.
Asset utilisation Continually improve the utilisation

of our assets, with the primary asset
being our aircraft.
Profit delivery Continued sustainable growth

in profit levels.

Strategic report
Governance
Progress on strategy Key performance indicators Principal risk to strategy
Q4 2014/15 has been a return Total revenue was 574.1m. Continued softer yield driven by
to growth with a 15% increase in lower fuel prices.
capacity compared to Q4 2013/14, Revenue per seat improved
leading the way for future revenue from 49.70 to 51.35. Airline or intermodal competition
Other information
expansion. This includes the on key routes.
launch of two new bases and
26 new routes.
74m of gross cost savings over 2.7% reduction year-on-year Fuel is a significant part of the cost
the last two years have been of Cost per seat. base and is outside of our control.
delivered. Solutions for seven
of the 14 E195 aircraft have been Remove E195 aircraft from fleet. Quasi-monopolistic suppliers have
identified, we need to resolve very aggressive pricing strategies
the outstanding seven in many of our sectors (e.g. airports).
Cost to dispose of the E195s.
We have steadily driven Block hours per aircraft per Winter demand is considerably
improvements in aircraft day 6h58 (2013/14: 6h10). lower than summer.
utilisation with a 13% increase
year-on-year
We removed most of our Loss before tax (35.6m). Exchange rate movement on
legacy issues and improved USD loan revaluations.
the performance of our core Earnings per share (16.5)p.
UK business. Regulatory and legislative changes.
Significant deterioration of
European economy.

Business review
Focusing on our
core business
Developing our branded, scheduled business
while delivering a world-class White Label
implementation at SAS
Flybe UK Commercialisation
In addition to cost reductions, actions taken by our
In 2014/15, Flybe has focused on optimising its route
new Commercial team to stimulate passenger numbers
network, fleet, cost base and load factor performance.
and improve passenger revenues have helped the
underlying business to grow sustainably. Along with
Configuration
a number of marketing enhancements, these actions
The UK network is being optimised in order to improve
included offering more attractive lead-in fares.
overall profitability and a detailed review resulted in the
We also redesigned our product and service offering,
creation of two new bases during 2014/15, at Aberdeen
established an array of commercial partnerships
and Bournemouth.
including with Avios Travel Rewards, and signed up
new code-sharing arrangements including with Finnair
We improved route profitability by removing
and Cathay Pacific.
unprofitable seat capacity, increasing load factors
and reducing unit costs.
A route assessment model has been developed and
>>We decreased seat capacity by 7.6% compared to optimised for the evaluation of new routes. Since April
the previous year through the closing of six smaller 2014, 362 routes have been assessed using the model
bases, the cessation of 24 unprofitable routes and and in 2014/15 26 new regional routes have been
the temporary grounding of, on average, nine of opened and 24 regional routes have been closed.
the 14 E195 jets.
Structural change in fuel price
>>Despite lower seat capacity, we held passenger
During 2014, fuel prices have halved in a matter
volumes flat at 7.7m through load factor
of a few months. It is inevitable that yield pressure
improvements. We improved load factor in almost
is a direct consequence of this for a number of
every month from August 2013 through to the end
complementary reasons:
of last year. For the financial year ending March 2015,
load factor was up 5.7ppts to an annual all-time high >>Airlinesare often encouraged by lower fuel prices
of 75.2%. to pass on any savings to gain volume or to inject
incremental capacity on the assumption that
>>The increases in load factor helped mitigate the
lower costs and hence lower prices can be used
impact of lower yields from our volume-based
advantageously to generate demand on the
pricing strategy and the investment in new routes,
incremental seats deployed. There is airline
minimising the reduction in Revenue per Available
competition on 30% of our seat capacity.
Seat Kilometre (RASK) year-on-year to 1.6%.
Passenger Revenue Per Seat (RPS) was up 3.3% >>Marginal or loss-making airlines are usually unable
driven mainly by a 4.3% increase in sector length. to hedge their fuel costs due to their credit risk.
When fuel costs fall, these airlines tend to pass
We improved aircraft utilisation by 13% through on any savings immediately hoping to gain volume
improved schedule planning and design and more against airlines which are hedged significantly
effective crewing and rostering. above spot rates, thereby boosting their marginal
cash intake.

Strategic report
Governance
75.2%
Load factor
7.7m
Passengers
51.35
Passenger revenue
(2013/14: 69.5%)1 (2013/14: 7.7m) per seat (2013/14: 49.70)2
>>Intermodal competitors (road, rail and ferry The business continues to focus on exiting these
operators) often sharpen their prices when airlines aircraft from the business and will continue to monitor
start to pass on fuel cost savings especially on surplus capacity costs as relevant into 2015/16.
shorter, regional sectors. We have intermodal
competition on 70% of our seat capacity. 2015 2014
m m
The combination of softer industry yields and the Q400 surplus capacity costs 0.3
fact that we at Flybe have been almost fully hedged E195 surplus capacity costs 26.0 1.4
Other information
at c50% above current spot rates inevitably means
Surplus capacity costs 26.0 1.7
that our margins have come under pressure.
E195 operational costs 14.5 38.9
Surplus aircraft Total E195 costs 40.5 40.6
Divesting the E195 aircraft is a key priority of the
Company. However, this has proven more difficult than
Finding a viable solution for the remaining seven E195s
expected. Four left the business during the second half
is the primary objective of the Company.
of the year, with a fifth being returned to the lessor
by the latest in July 2015. Two E195s will be deployed
Cash
during 2015/16 to operate out of our new Cardiff base.
Working with our lenders we have reduced restricted
There are therefore seven remaining aircraft to resolve.
cash from 40.5m in March 2014 to 18.0m at the end
As a result, the annual surplus capacity costs of the
of March 2015 and we had a very healthy 195.9m
legacy E195s will reduce somewhat in 2015/16, but
total cash at the end of March 2015 (end of March 2014:
will nevertheless still be a drag on profit.
218.4m).
During 2014/15, on average, nine of the 14 E195s were
Costs
temporarily grounded and therefore represented
We have removed 27m of costs out of the business
capacity surplus to the ongoing needs of the business.
during 2014/15 in addition to the 47m achieved in
The costs of the surplus E195s (Surplus capacity
2013/14. This totals 74m gross savings, 3m above
costs) include an apportionment of the total Group
the original 71m identified as part of the commitments
aircraft fleet ownership costs and maintenance to
outlined in last years turnaround plan. We delivered
nine aircraft, in addition to other related costs such
a restructured cost base with a 2.7% year-on-year
as onerous lease provisions. The costs described as
reduction in Cost per Seat excl. E195 surplus
surplus have been estimated by considering months
costs. This unit cost reduction was delivered after
when each grounded E195 has not flown as part of the
reinvestments in marketing, contact centre, and
commercial fleet, and months where those E195s have
recruitment but excludes the EU261 historical provision.
flown up to 60 sectors in the month to keep the aircraft
operationally ready.
On that basis 26.0m of the 40.5m total aircraft costs 1 Sold seats (Flybe ticketed passengers on either Flybe operated
(ownership, lease and maintenance) incurred during scheduled services or hardblock routes operated by the codeshare
2014/15 for the E195 fleet, were surplus. partner) / scheduled available seats.
2 Passenger revenue (fare revenue + ancillary revenue) / scheduled
available seats (seats available for passenger occupancy on
scheduled services).

Business review
continued
40.8m
Flybe Training Academy
Flybe continues to develop and promote talent within
the aviation industry through the training programmes
it provides at its Exeter Training Academy. The state-
of-the-art building has 26 classrooms, a simulator FAS revenue
hall with two full flight Level D simulators, cabin crew
simulator hulls for safety and refresher training,
and an engineering apprentice workshop. Flybe Finland
During 2014/15, the Board made the decision to
Qualifications offered include a flight deck Multi-Crew
exit the Flybe Finland joint venture with Finnair.
Pilots Licence (under the first CAA-approved scheme
Flybe Finland was not progressing towards being
for a UK airline), cabin crew and customer service
a profitable, self-financed, sustainable business.
NVQs, Foundation and Bachelor degrees, and
We could not control the extent of the loss-making
engineering aircraft type approvals.
scheduled flying. We therefore sold our interest in
Flybe Finland to Finnair for one Euro on 31 March 2015.
White Label
This was highly beneficial for Flybe as the potential
Under our new agreement with SAS, Scandinavias
future liabilities exceeded 125m.
largest carrier, we will operate four ATR 72-600 aircraft
on behalf of SAS with initial operations due to start
The losses for Flybe Finland from April 2014 to
in October 2015. The aircraft, which will operate under
September 2014 were 2.0m and the investment
Flybes Airline Operating Certificate, will be used
in Flybe Finland was impaired by 10.0m.
on short-haul SAS services in Europe and will be
provided with Flybe flight and cabin crew as well as
maintenance. The agreement is for a period of six years Flybe Aviation Services (FAS)
with scope for it to be extended and also for a further In November 2014, we created FAS, a stand-alone
four aircraft to be brought into service as required. entity to house our maintenance, repair and overhaul
(MRO) business. The business is based in Exeter and
includes the MRO business that was part of Flybe
4
Limited whilst continuing 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.
ATR 72-600 aircraft
2.3m
We will operate four ATR 72-600 aircraft
on behalf of SAS with initial operations
due to start in October 2015
FAS profit before tax
Contract flying is not confined to Scandinavia, with two

aircraft currently operating in Brussels Airlines colours The combined business delivered revenue of 40.8m
under a White Label arrangement. and a profit before tax of 2.3m (2013/14: Revenue
35.4m; PBT 2.2m). Revenue for the MRO during
We had originally identified White Label development 2014/15 up to the end of October 2014 was 23.2m
as a second engine of growth, but we have learned and Flybe Aviation Services revenue between
over the past 12 months that adoption by mainstream November 2014 and March 2015 was 17.6m.
airlines across Europe will be slow. This is primarily
because there is a high degree of inertia and politics
in many outsourcing decisions as many stakeholders
are affected and government influence remains
extensive. Due to the time and effort required to
overcome non-financial barriers, we are reducing
our emphasis on building this activity with other
airlines on a proactive basis. We will look to develop
it further, but on an opportunistic basis for the
time being.

Strategic report
17.4% Flybe Aviation Services (FAS)
Governance
Increase in manhours in the MRO and FAS
Manhours in the MRO and FAS increased by 17.4% to

534,000 hours (2013/14: 455,000 hours) following the
streamlining of the operation. Of this total, some 53.6%
was for third party customers in 2014/15 (2013/14:
59.1%), with the balance being work on behalf of Flybe.
534,000
MRO and FAS manhours
Our 9,000m2 facility at Exeter delivered

Overall, FAS has taken positive steps to retain its
position as a quality service provider with its focus
540,000 worked hours in 2014/15 across 124
strongly placed on sustaining an efficient cost base jobs. This work covered 22 different customers
that enables it to address competitively the needs of spanning 5 continents making FAS a truly
an ever-changing and diverse regional aircraft sector. global brand in regional aircraft maintenance.
Other information
This achievement could not have been realised
In addition, FAS has entered into an eight and a half without the experience and professionalism of
year contract with Airbus for airframe related MRO the work force at Exeter. It was also a year that
of the Royal Air Forces new fleet of 22 A400M Atlas
airlifters at Brize Norton. The A400M will be operated
saw 12 Graduate Trainees employed.
by the RAF, with an operating life expectancy of c35
years. The first aircraft was delivered to the RAF in In 2014/15, we saw the start of the A400M
November 2014. FAS has established a dedicated MRO operation at Brize Norton. A small team of
facility at Brize Norton to carry out this work and we staff from Exeter relocated to Brize Norton
are building a long-term partnership with Airbus to to get this venture under way and their
provide this service for the future. numbers continue to grow with new FAS
team members as the RAFs newest fleet
grows. This project outside of its obvious
military exposure has seen FAS develop its
expertise on Airbus aircraft, complementing
the list of Original Equipment Manufacturers
covered including Bombardier, Embraer,
ATR and Bae.
All of these activities were supported by our

Exeter-based support departments including
workshops, planning, logistics, safety and
quality, and our team in the training academy.
This combination of heavy base maintenance
experience with comprehensive support
structures has seen FAS become Europes
largest regional aircraft Maintenance Repair
and Overhaul provider.

Financial review
Core profitability improving,

although the legacy E195s
are a drag on Group profit
Good progress in cost discipline resulting
in cost per seat reduction
Summary
During the first full financial year of our three year
transformation plan, we have taken significant actions
to reduce the cost base and to refocus the commercial
operations of the business. These have entailed the
departure of over 65 employees, a reconfiguration
of the routes we serve and the sale of our joint venture
in Finland. As a result, there are a number of one-off
and technical items that mask the underlying profit
performance.
Flybe made a reported loss before tax of (35.6)m

(2013/14: 8.1m profit). However, this loss before tax
is affected by non-cash revaluations on our USD loans
that are intended to be hedges against the value of
each aircraft, whose value is denominated in dollars.
If these movements are excluded, we made an adjusted
loss of (25.4)m (2013/14: loss of (0.1)m).
Philip de Klerk
Chief Financial Officer Total revenue reduced by 7.5% to 574.18m from
620.5m, as the UK business has optimised its network
through the planned reduction of overall capacity
by 7.6% to 10.3m seats whilst maintaining passenger
We have taken significant action to numbers at 2013/14 levels (7.7m) through yield
reduce the cost base and to refocus the investment and improved marketing.
commercial operations of the business.
The MRO business, Flybe Aviation Services, generated
a profit before tax of 2.3m (2013/14: profit before tax
of 2.2m).
Flybe Finland generated a loss from the joint venture

of (2.2)m from April 2014 to September 2014 2013/14:
0.8m) and interest income of 0.2m. Flybe Finland
did not deliver on its expectations of generating profits
in 2014/15 due to poor performance in its scheduled
flying operations and therefore Flybe sold its interest
in Flybe Finland for one Euro. 10.0m was provided
for the impairment of the interest in Flybe Finland.
The loss in the first half of (2.0)m and the impairment
of (10.0)m combined is a (12.0)m loss for the year.

Strategic report
(35.6)m (25.4)m 16.6m
Governance
Loss before tax (2013/14: Adjusted loss before tax1 Illustrative profit before
profit before tax of 8.1m) and USD loan revaluations tax2, excluding (10.2)m
(2013/14: (0.1)m) USD loan revaluation
losses, (26.0)m E195
surplus costs, (4.0)m
EU261 catch up provision
and (12.0)m discontinued
operations (2013/14: 1.7m)
During 2014/15 Flybe has continued to reduce costs The table below sets out a reconciliation from (loss)/
and we have removed 27m of costs from the business profit before tax to adjusted (loss)/profit before tax
during 2014/15 in addition to the 47m achieved in which adjusts the result for USD loan revaluations.
2013/14. This totals 74m gross savings, 3m above
the original 71m identified as part of the commitments 2015 2014 Change
outlined in last years turnaround plan. m m %
(Loss)/profit before tax

Flybe continues to have a robust balance sheet with unadjusted (35.6) 8.1 (327.2)%
free cash of 177.9m at the end of March 2015 (2013/14: USD loan revaluation 10.2 (8.3) (222.9)%
177.9m), with restricted cash of 18.0m (2013/14: Adjusted profit before tax
40.5m) and net cash of 76.7m (2013/14: 116.9m).
Other information
and USD loan revaluations (25.4) (0.2) 11,600%
EBITDAR reduced 29.9% to 69.4m from 2013/14s
The adjusted profit/(loss) before tax figures given
98.7m.
above are non-GAAP measures.3
Set out below is a reconciliation from operating loss
1 Adjusted loss before tax is calculated as Reported loss before
to the EBITDAR figures. All EBITDAR metrics are tax of (35.6)m excluding USD loan revaluations (10.2)m and
non-GAAP measures.3 is therefore (25.4)m.
2 Illustrative profit before tax is calculated as Reported Loss before
EBITDAR is a common airline profit measure which tax of (35.6)m excluding USD loan revaluations (10.2)m,E195
surplus costs (26.0)m, EU261 catch up provision (4.0)m and
is used for making comparisons between airlines. discontinued operations (12.0)m, and is therefore 16.6m profit.
3 Non-GAAP measures exclude amounts that are included in the
most directly comparable measure calculated and presented in
2015 2014 Change accordance with IFRS, or are calculated using financial measures
m m % that are not calculated in accordance with IFRS. The reconciliations
Operating (loss)/profit (13.0) 1.3 (1,100)% above describe how the non-GAAP measure is determined from
the most directly comparable measure calculated and presented
Discontinued Operations in accordance with IFRS. The non-GAAP measures are not regarded
(loss)/profit (12.0) (0.5) (2,300)% as a substitute for, or to be superior to, the equivalent measures
Depreciation and calculated and presented in accordance with IFRS or those
calculated using financial measures that are calculated in accordance
amortisation4 13.8 14.3 (3.3)% with IFRS. The non-GAAP measures described may not be directly
Aircraft rental charges 80.6 83.6 (3.6)% comparable with similarly-titled measures used by other companies.
4 Excludes depreciation on maintenance assets set up in accordance
EBITDAR unadjusted 69.4 98.7 (29.9)% with IFRS requirements.

Financial review
continued
69.4m
Five Q400 aircraft were contracted to return to lessors
in 2014/15, but these aircraft were purchased from the
lessors in order to provide capacity for the expansion
at London City that commenced in October 2014.
Unadjusted EBITDAR (2013/14: 98.7m)
The following table shows the current number of
aircraft that are contracted for delivery to the Group.
Illustrative profit/(loss) before tax
Flybe made a loss before tax of (35.6)m (2013/14: Bombardier
8.1m profit). However, this loss before tax is affected ATRs E175s Q400s
by non-cash revaluations on our USD loans that are Flybe UK
intended to be hedges against the value of each 2015/16 4 10
aircraft, whose value is denominated in dollars. If these 2016/17 9
movements are excluded, we made an adjusted loss
2017/18 3 5
of (25.4)m (2013/14: loss of (0.1)m). Cost of surplus
aircraft were (26.0)m this year against (1.7)m the 2018/19 1
previous year and this year included significant costs Total 4 4 24
of the Finland discontinued operations of (12.0)m
and (4.0)m provision for EU261 claims on delayed Fleet under management
and cancelled flights prior to 1 April 2014. Conversely, The profile of Flybes fleet under management at
2013/14 had one-off restructuring costs of (10.7)m, 31 March 2015 is summarised below:
offset by one-off 10.5m profit from the sale of our
Gatwick slots. For illustrative purposes, therefore the Number of aircraft
UK profit net of these factors would have been 16.6m Net
(2013/14 1.7m). At move- At
Number 31 March ments 31 March
of seats 2014 in period 2015
The business continues to focus on exiting surplus UK airline
aircraft costs and will continue to monitor as they are
Embraer E195 regional jet 118 14 (4) 10
relevant into 2015/16.
Embraer E175 regional jet 88 11 0 11
Bombardier Q400
2015
m
2014
m
2013
m
turboprop 78 45 0 45
Illustrative profit/ 70 (4) 66
(loss) before tax 16.6 1.7 (33.5) Flybe Finland
EU261 catch up ATR 42 turboprop 48 2 (2)
provision (4.0) ATR 72 turboprop 6872 12 (12)
Discontinued Embraer E170 regional jet 76 2 (2)
operations (12.0) 0.1 Embraer E190 regional jet 100 12 (12)
Restructuring costs (10.7) 28 (28)
Sale of Gatwick slots 10.5 Total 98 (32) 66
Surplus aircraft Held on operating lease 89 (37) 52
costs (26.0) (1.7) (2.9) Owned and debt financed 9 5 14
Adjusted PBT (25.4) (0.2) (36.4) Total 98 (32) 66
Foreign Exchange Total seats in fleet 8,410 5,658
translation of loans (10.2) 8.3 (4.7)
Average seats per aircraft 85.8 86.0
Reported PBT (35.6) 8.1 (41.1)
Average age of
fleet (years) 5.93 7.0
Fleet
Flybe UK As at 31 March 2015 Flybe had 66 aircraft under
One of the key legacy issues tackled by Flybe during management. Flybe Finland is no longer part of
2014/15 was to resolve the contractual commitment the Flybe Group.
to acquire 24 additional Embraer E175 aircraft. This has
been done without any penalties. In addition, as part
66
of this resolution, Flybe has committed to receiving
four E175s in 2018 and an additional 24 used Republic
Q400 aircraft between 2015 and 2019.
Aircraft

Strategic report
51.35
As discussed in the Business review above, Flybe UK
discontinued under-performing routes and drove load
factors by yield investment and improved commercial
execution. The 7.6% reduction in seat capacity was
Governance
Flybe UK passenger revenue per seat, offset by a 5.7 percentage point increase in load factor.
up 3.3% from 49.70 in 2013/14 This resulted in annual passenger numbers being
maintained at 7.7m. However, with constant passenger
numbers the reduction in passenger yield did result
The Group will continue to match capacity to demand, in a 4.6% reduction in passenger revenue to 528.6m.
particularly in its core UK market. Flybe has found
solutions for seven of the surplus E195s during 2014/15,
7.7m
with four returned to lessors, one has been returned in
May 2015, and two to be operated as part of the new
Cardiff base. This leaves seven further aircraft to be
resolved. Flybe is pursuing multiple options in order
Flybe UK passengers, same as 2013/14
to find appropriate solutions.
Business results
Flybes results analysed by segment are summarised The benefit of this rationalisation, however, is shown in
below. These results are before tax, other than share the improved performance per seat. Revenue per seat
of joint venture results. rose by 3.3% (to 51.35).
2015 2014
Contract flying was carried out for Helvetic and
m m Aurigny for a few months during 2013/14 in addition
Business revenues: to a long-term Brussels Airlines contract that continues
Flybe UK 550.7 599.6 in 2014/15, albeit on a smaller scale.
Other information
FAS 40.8 35.4
Other revenue in Flybe UK totalled 10.5m,
Inter-segment sales (17.4) (14.5) representing a 64.4% decrease on the 29.5m
Group revenue 574.1 620.5 generated in 2013/14, as we reduced unprofitable
charter operations, which had been used in the
Business adjusted (loss)/profit
previous year to deploy surplus capacity.
before tax:
Flybe UK1 (24.1) 1.2
Operating costs
FAS2 2.3 2.2 Operating costs (on a Flybe UK basis, including
Group costs (3.6) (3.6) restructuring and surplus capacity costs)
Group adjusted (loss) before
tax and USD loan revaluations3 (25.4) (0.2) 2015 2014
m m
Revaluation gain/(loss) on
USD aircraft loans (10.2) 8.3 Fuel and aircraft operations 283.3 315.8
Group (loss)/profit before tax (35.6) 8.1 Aircraft ownership
and maintenance 148.6 153.9
1 Flybe UK adjusted loss before tax and restructuring is the segment
loss of (24.1)m (2013/14: 1.2m profit) after deducting Group costs Staff and other net
of 3.6m (2013/14: 3.6m), net restructuring of 0.0m (2013/14: operating expenses 133.8 130.1
0.2m) and revaluation losses on USD aircraft loans of (10.2)m Operating costs 565.7 599.8
(2013/14: gains of 8.3m).
2 FAS profit before tax is the segment profit of 2.3m (2013/14: 2.2m).
3 Adjusted (loss)/profit before tax and USD loan revaluations defined Operating costs, including restructuring and surplus
as (loss)/profit before tax and revaluation losses on USD aircraft capacity costs decreased by 5.7% from 599.8m to
loans of (10.2)m (2013/14: gain of 8.3m).
565.7m largely due to the reduction in fuel price and
capacity. Fuel and aircraft operations costs decreased
Flybe UK by 10.2%, or 32.5m. There was a 3.4%, or 5.3m,
Revenue saving in aircraft ownership and maintenance costs
due to a lower average fleet in the year (66 aircraft
2015 2014 versus 70 in 2013/14).
per per
m seat m seat
Passenger revenue 528.6 51.35 553.9 49.70

Contract flying 11.6 16.2
Other revenue 10.5 29.5
Total revenue 550.7 599.6

Financial review
continued
Operating costs (on a Flybe UK basis, excluding During the year to 31 March 2015, Flybe UK used some
restructuring and surplus capacity costs) 160,702 tonnes of jet fuel, a reduction on 2013/14 of 8%
from 175,200 tonnes. The average market price during
2015 2014
the year was USD807 per tonne (2013/14: USD974),
per per
with the Group paying a blended rate (net of hedges)
m seat m seat of USD949 per tonne (2013/14: USD982). Including
Fuel and aircraft into plane costs, Flybes fuel costs in 2014/15 of
operations 283.3 27.50 315.8 28.45 105.5m (2013/14: 120.0m) represent an all-in cost
Aircraft ownership of USD1,041 per tonne for 2014/15 (2013/14: USD1,062).
and maintenance 122.6 11.90 152.2 13.71 Using constant currency, our fuel costs per seat
Staff and other net decreased by 3.9% from 10.63 to 10.24.
operating expenses 133.8 13.00 129.9 11.70
Operating costs 539.7 52.40 597.9 53.86 Flybe UK operates a policy of managing fuel price
volatility by entering into derivative contracts
representing a portion (between 60% and 90%) of
Flybe UKs analysis of operating costs its aviation fuel requirements a minimum of 12 months
(before restructuring and surplus capacity costs) 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
Fuel 19.55% season. As at March 2015, 70% of the years fuel
requirement to March 2016 is hedged at an average
Aircraft operations 32.94%
price of USD919 per tonne. Further details are given
Aircraft ownership
in note 36 to the Consolidated Financial Statements.
and maintenance 22.72%
Taking into account our hedged position, each USD50
Staff 13.54%
increase/decrease in the price of jet fuel reduces/
Other operating costs 11.25% improves Group profits in 2015/16 by 1.7m.
Efficiencies have been derived from our fleet

replacement programme, operational improvements
and careful management of routes and frequencies.
Fuel
Overall, 15.6kg of fuel was consumed for each seat
The spot price of fuel has dropped by nearly 50%
flown (2013/14: 15.7kg per seat). This remains a
in 2014/15. However, Flybe has a hedging policy to
significant improvement on the 19.1kg per seat
protect itself from short-term fluctuations in spot
consumed in 2007/08 due to our investment in a
prices, and so, in line with most other airlines, our
modern, fuel-efficient, two-type aircraft fleet best
net fuel costs decreased by only 12.1% to 105.5m
suited to regional flying.
(2013/14: 120.0m). Aviation fuel prices remain liable
to large and unpredictable movements due to a variety
of external factors, including changes in supply and
demand for oil and oil-related products and volatility
in the futures markets.
Flybe UK operating cost per seat (excluding restructuring and surplus capacity costs1) ()
(56)
(55)
(54) (53.86) 0.69

(53.17) 0.39
(53) 0.10 1.58
(0.65) (52.40)
(52) (0.44)
0.36 (0.57)
(51)
(50)
2013/14 Foreign 2013/14 Fuel Net airport, Aircraft Staff Marketing Other Passenger 2014/15
Operating exchange operating en route ownership costs and operating claims Operating
cost per cost per seat charges and distribution expenses provision cost per
seat at constant and ground maintenance costs seat
currency operations costs
1 2014/15 operating cost per seat including E195 surplus costs is 54.92.

Strategic report
Net finance costs Flybe Finland
Net finance costs worsened by (10.2)m due to Flybe has divested its interest in Flybe Finland,
a non-cash, non-underlying movement on the however the summary results are as follows:
retranslation of US Dollar denominated debt used
Governance
to fund the acquisition of aircraft, particularly the 2015 2014
newer E175 regional jets, compared to a gain of m m
8.3m in 2013/14. The movement in this US Dollar 60% share of Flybe Finland
liability cannot be naturally offset against the value joint venture loss (2.2) (0.5)
of the aircraft as the latter is recorded in pounds Other net costs
Sterling in order to comply with the requirements including interest 0.2 (0.3)
of International Financial Reporting Standards. Impairment of
This income statement charge has therefore been discontinued operation (10.0)
removed in arriving at adjusted loss before tax. Business result Flybe Finland (12.0)1 (0.8)
Foreign exchange 1 Flybes share of the joint venture loss was (2.2)m between April
2014 to September 2014, interest income was 0.2m, and the Flybe
The Group foreign currency hedging policy has investment was impaired by (10.0)m, for a total of (12.0)m.
an objective to reduce the volatility of costs. Flybe
manages its foreign exchange positions based on its With ongoing profitability issues in Flybe Finland,
net foreign currency exposure, being foreign currency and the slower than expected turnaround, Flybe has
expenditure less associated revenue. Flybe UK divested its interest in the joint venture to Finnair for
currently has a relatively small net exposure to the one Euro resulting in the impairment of the Groups
Euro, but has significant US Dollar costs in relation to investment of 10m.
fuel, maintenance, aircraft operating leases and loan
repayments. The Group generates no significant US FAS
Dollar revenue and actively manages its US Dollar In November 2014 we created FAS, a stand-alone
position through a foreign exchange forward purchase maintenance, repair and overhaul (MRO) business
Other information
programme similar to that outlined for fuel. As at which includes the MRO business that was part of
31 March 2015, 69% of our anticipated US Dollar Flybe Ltd. The combined results for MRO and FAS
requirements for the year to 31 March 2016 were during 2014/15 were as follows:
hedged at an average exchange rate of USD1.5764.
All existing derivative financial instruments are forward
swap arrangements. 2015 2014 Change
m m %
Taking into account our hedged position, each $0.05 Revenue 40.8 35.4 15.3%
reduction/improvement in the US Dollar exchange rate Operating costs (38.5) (33.2) (16.0)%
has the effect of reducing/increasing Flybe UKs profits Profit before tax 2.3 2.2 4.5%
in 2015/16 by approximately 2.6m.
Revenue increased by 15.4% in 2014/15 to 40.8m
Carbon emissions (2013/14: 35.4m), of which 23.2m was for third party
The Group is required to purchase carbon allowances customers (2013/14: 20.9m). This increase was driven
for all flights departing from and arriving into the EU by the 17.3% increase in manhours from 455,100
in order to offset its carbon footprint in each calendar manhours in 2013/14 to 533,800 hours in 2014/15.
year. Flybe manages its exposure by purchasing carbon This, in turn, resulted in higher fixed costs and available
emissions allowances through a forward purchase capacity in the MRO business. The increase in revenue
programme to top up the free allowances awarded generating capacity led to a 16% increase in operating
to it under the scheme. The table below sets out costs from 33.2m to 38.5m, and an improved profit
Flybe UKs emissions and carbon allowances for each performance.
of the periods under review:
Group costs
2015 2014
Group costs of 3.6m were held flat to 2013/14 and
Calendar year Budget Actual include Group Board salary costs and Group related
Anticipated carbon allowances legal and professional fees. The reduction in Board
required, tonnes 544,390 448,909 costs in the year has been offset by higher advisor,
Free allowance allocation, legal and professional fees. No bonuses were paid
tonnes 222,778 222,778 or accrued for in the year.
Proportion hedged at
beginning of period 100% 99% Profit/(loss) before and after tax
The Groups reported loss before tax was (35.6)m
Effective carbon rate 5.40 5.04
(2013/14: 8.1m profit).

Financial review
continued
The Groups adjusted loss before tax and USD aircraft equity issue, the group succeeded in reducing
loans revaluation was (25.4)m (2013/14: (0.2)m). restricted cash (i.e. cash held as security for others,
such as merchant acquirers) to 18.0m, from 40.5m
Losses after tax were (35.7)m (2013/14 8.0m profit). in the prior year. Of this, (36.6)m was spent on capital
The current year tax charge was 0.1m (2013/14: 0.1m). expenditure, largely for the purchase of 5 end of lease
Q400s for 31.7m, in line with our stated aim to own
EPS and dividends a higher proportion of our fleet.
Basic earnings per share for the year were (16.5)p,
compared to earnings per share of 9.6p in 2013/14. Financing activities of 6.5m, included net borrowings
of 7.0m and 0.5m of net interest payments
No dividends were paid or proposed in either the (2013/14 repaid 10.7m loans, and increased
current or prior financial year. cash and equivalents by 154.6m as a result of the
150.1m net equity issuance). As a result, total cash
Cash flow (excluding debt) available was 195.9m at the year-end
(2013/14: 218.4m). This reinforces the strength of the
balance sheet.
2015 2014 Change
m m m
Balance sheet
Net cash inflow from operating
activities before restructuring 30.1 7.3 22.8
Cash flows from 2015 2014 Change
m m m
restructuring activities (12.8) 12.8
Aircraft 166.4 147.0 19.4
Net cash inflow/(outflow) from
operating activities after Other property, plant
restructuring 30.1 (5.5) 35.6 and equipment 22.7 23.6 (0.9)
Net proceeds from issuing Interest in joint ventures 12.4 (12.4)
new equity 150.1 (150.1) Net funds 76.7 116.9 (40.2)
Net capital (expenditure)/ Derivative financial instruments (7.2) (7.6) 0.4
income after disposal proceeds (36.6) 21.7 (58.7) Other working capital net (115.6) (105.4) (10.2)
Net proceeds/(repayment) Deferred taxation 8.5 4.5 4.0
from new loans 7.0 (10.7) 17.7 Other non-current assets
Net interest paid (0.5) (1.0) (0.5) and liabilities (11.5) 2.7 (14.2)
Net increase in cash and cash Net assets/(liabilities) 140.0 194.1 (54.1)
equivalents 154.6 154.6
Cash and cash equivalents The 166.4m of net book value of aircraft represents
at beginning of year 177.9 23.3 154.6 owned aircraft, engines and aircraft modifications.
Cash and cash equivalents
195.9m
at end of year 177.9 177.9
Restricted cash 18.0 40.5 (22.5)
Total cash 195.9 218.4 (22.5)
Total cash including restricted cash
The group generated 7.6m from operating activities
(2013/14 used 5.5m after restructuring costs). Largely
(2013/14: 218.4m)
due to the strengthened balance sheet arising from the
Group cash flow (m)
300
250
22.5 (36.6) 18.0 195.9
200 177.9 7.5 6.5 177.9
150
100
50
0
Free cash at Operating Transfer from Investing Financing Free cash at Restricted cash Total cash at
March 2014 cash flow restricted cash activities activities March 2015 March 2015

Strategic report
140.0m
Country and currency risk
Flybes UK and European businesses operate in a
global marketplace. Most of Flybes customers are
based in Europe, although the MRO business also has
Governance
Total assets (2013/14: 194.1m) customers in Africa, the Middle East and the central
Asian republics. Most of Flybes revenues are derived
from UK-based customers (about 85% of group
On 31 March 2015, Flybe sold its interest in our joint revenue). Aircraft are bought and sold in US dollars as
venture in Finland for one euro. are other key costs such as fuel and aviation insurance.
Airport and en route charges are payable in a mix of
Net funds, representing cash offset by debt, at Sterling and euros and the further development of
31 March 2015 of 76.7m (2014: 116.9m) benefited European operations will mean greater exposure to
from the capital inflows referred to in the cash flow Euro revenues and costs. This is further considered in
section on page 26. Net funds at 31 March 2015 the Risks and Uncertainties section on pages 28 to 31
includes restricted cash of 18.0m (40.5m at and note 36 Financial instruments.
31 March 2014) which represents, predominantly,
cash held with the Groups bankers to facilitate card Going concern
acquiring services and guarantee arrangements with Flybes business activities, together with the factors
suppliers, and cash deposits held in favour of aircraft likely to affect its future development, performance
owners to secure operating lease arrangements. Since and position, are set out in the Chairmans and Chief
the year-end, a net 22.5m of restricted cash has been Executive Officers statements on pages 02 to 10.
released by the Groups bankers. The financial position of the Group, its cash flows and
liquidity position, and events since the balance sheet
The mark-to-market valuation of derivative financial date are described in the financial performance section
instruments decreased from a liability of 7.6m at of that statement on page 04 and in the Financial
31 March 2014 to a liability of 7.2m at 31 March 2015, Review on pages 20 to 27. In addition, note 36 covers
Other information
as foreign exchange rates and fuel prices moved Flybes financial risk management objectives, details
against Flybes portfolio of contracts. Net negative of its financial instruments and hedging activities and
other working capital increased from (105.4)m to its exposures to credit risk and liquidity risk.
(115.6)m, largely due to increased current deferred
income, the creation of the EU261 flight delay provision, Flybe had free cash balances of 117.8m at
being offset by a reduction in the restructuring provision. 31 March 2015, and has met all of its operating
lease commitments and debt repayments as they
The balance sheet also includes the impact of the have fallen due during the year.
defined benefit pension scheme deficit of 21.0m
which is included in Other non-current assets and Flybe faces trading risks presented by current
liabilities above. This scheme, which is closed to future economic conditions in the aviation sector, particularly
benefit accrual, had been in deficit by 2.5m at March in relation to passenger volumes and yields and the
2014. The year on year increase of 18.5m in the deficit associated profitability of individual routes.
is primarily due to the change in the discount rates.
A recovery plan of 0.5m contribution per annum from The Group is exposed to uctuations in fuel prices
Flybe was agreed as part of the last actuarial review and foreign exchange rates. The Groups policy is to
in 2013. hedge between 60% and 90% of estimated exposures
12 months in advance. As of 5 June 2015, we had
Covenants purchased 81% of our anticipated fuel requirements
The Group has certain financial performance and 64% of our anticipated US Dollar requirements for
covenants in relation to some of its aircraft financing the following 12 months.
agreements. These specify performance, depending
on the contractual terms, against a series of tests, The Directors have prepared a detailed trading budget
which are performed either quarterly, half-yearly and cash flow forecast for a period which covers at
or annually. Flybe has met all the terms of the least 12 months after the date of approval of these
covenants tested since the inception of the Financial Statements. Having considered the forecasts
arrangements to 31 March 2015 (see note 24 and making other enquiries, the Directors have a
to the Consolidated Financial Statements). 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.

Risks and uncertainties
Principal risks are clear

This section describes the principal risks and
uncertainties which may affect Flybes business,
financial results and prospects
Risk description Potential impact Inherent Mitigation
risk trend
(movement
against prior year)
Safety and security

Failure to prevent a health Significant adverse effect Safe and secure operation is the key
and safety or security- on Flybes reputation, priority for all of Flybes management
related incident including financial results and and staff. Flybe operates both a
terrorist threat, or attacks operational performance. strong Safety Management System
from either internal or and a comprehensive Security
external sources or to Management System and has
respond adequately appropriate systems and procedures
to a safety or security- in place, including trained staff, to
related event. respond effectively to such incidents.
Commercial and operational

Flybe is exposed to Adverse pressure on Flybe monitors route performance
sustained deterioration revenue and load factors, within its commercial teams
in general economic and negative impact on and adjusts flying patterns to
conditions, and reduction Flybes growth prospects, customer demand.
in domestic and regional financial condition and
air travel, particularly in the value of its assets, Flybes fleet planning is designed to
the UK. particularly aircraft. provide it with the most fuel-efficient
regional aircraft available under a mix
of ownership and lease terms.
Flybe operates in a Adverse effect on market Flybe has a strong position in the
highly competitive share leading to reduced markets where it operates and
aviation market. revenue and profits. extends the reach of its brand
through franchising and alliances.
Processes are in place to monitor
and report on route-by-route
performance and competitor activity
and to react rapidly where necessary.
Trend key: Same Reduced Increased New

Strategic report
risk trend
Governance
(movement
against prior year)
Flybe is exposed to the Reduce demand, market Flybe has procedures in place to
effects of extraneous share and revenue, any of respond to such events, and to
events, such as which may adversely communicate effectively with
epidemics, natural affect Flybes financial passengers and shareholders.
disasters (e.g. severe results or operational
weather or ash cloud performance.
disruption).
Flybe is becoming Technical or mechanical Flybe operates a rigorous aircraft
increasingly reliant on issues could result in a maintenance programme, with
the Bombardier Q400 grounding of the fleet continuous improvement to the
aircraft, with dispatch which would impact the aircraft reliability. In addition,
reliability being a key flying programme and the Strategic Services Agreement
factor in the performance negatively impact the signed with Bombardier delivers
of the airline. reputation of the modifications to Flybes Q400 fleet
aircraft type. over the next three years which
improve technical despatch reliability.
Standby aircraft within Flybes
Other information
flying programme also allow some
flexibility in aircraft availability.
Flybe is heavily Inability to implement IT project prioritisation and control

dependent on its successful development are in place in order to adequately
information technology could lead to Flybes focus attention and resources on
systems, the ongoing business plans not the key project deliverables.
development of those being fulfilled.
systems, and the internet Flybe uses third parties to
to operate its business. supplement its own resources;
Future scalability and effective processes relating to
resilience of such key contract review, compliance and
systems are an issue to management are in place to mitigate
the business maintaining the consequent risks that arise.
a competitive advantage.
The incidence of cyber- Loss of systems or A disaster recovery plan is in

attacks has increased connectivity to the place and includes moving certain
worldwide and Flybe internet, as a result of an operations to other sites.
is exposed to this as a internal or external threat,
result of its reliance on could lead to disruption Flybe uses third party experts
the internet for a high and lost revenue with an to assess risk and recommend
proportion of delivery adverse impact on Flybes mitigating actions that are being
of its sales. financial condition. implemented over time.
Breaches in IT security, Flybe has robust security

or fraud, could adversely procedures in place which
affect Flybes brand are tested and reviewed by
and reputation, and independent third parties.
have an adverse impact
on revenue.

Risks and uncertainties
continued

risk trend
(movement
against prior year)
Flybe depends on good Adversely affect Flybes Flybe has well-developed

industrial relations, reputation, financial consultation and negotiation
across all its regions, results and operational processes with its employees and
with a workforce that performance. its unions and continues to ensure
is, in significant part, its employment remuneration
unionised and is exposed reflects current market conditions
to shortages of key and practices that are supported
personnel. by succession planning policies.
Financial
Flybe is exposed Adversely affect Flybes Most suppliers can be replaced by
to the failure or reputation, financial an alternate. Contract negotiation
non-performance results or operational teams are highly experienced and
of commercial performance. knowledgeable of the industry with
counterparties as a strong track record of developing
well as requiring the value for Flybe.
services of key suppliers
such as airports, air traffic
control systems, fuel
supply companies, and
single source suppliers.
Fluctuations in fuel Adverse movements in While hedging cannot guarantee

prices and foreign these areas can adversely against significant long-term price
exchange rates. affect both Flybes profit changes, a well-established hedging
and financial position. strategy is in place that is designed
to provide certainty over a significant
proportion of Flybes cost base in
the coming 12 months.
Unavailability of Lack of adequate liquid Flybes policy seeks to maintain

suitable financing. resources could disrupt appropriate levels of free cash
and adversely affect which will be available to meet costs
Flybes financial results. in the event that our normal activities
are temporarily disrupted by, for
example, severe weather, volcanic
ash, extended industrial dispute
or fleet grounding.
Continuing performance There is a lack of material Flybes policy is to invest

of counterparties. loss in the event of surplus funds and enter into
non-performance by hedging agreements only with
these counterparties. counterparties that meet certain
credit rating criteria.
Trend key: Same Reduced Increased New

Strategic report
risk trend
Governance
(movement
against prior year)
Failure to remove surplus Adversely affect Flybes Flybe is in a number of discussions

aircraft costs, or to financial results. with other airlines and lessors about
have to take delivery removing surplus aircraft costs,
of additional aircraft and with aircraft suppliers to ensure
surplus to requirements. aircraft deliveries, and types of
aircraft, match Flybes requirements.
Reputational
Flybe operates an A security breach Flybe has robust security
e-commerce business could lead to material procedures in place which
and deals with a reputational damage. are tested and reviewed by
significant amount of independent third parties.
personal and business
information.
Regulatory
Other information
Regulatory changes in Adverse impact on Management engages with
the airline industry may reputation, costs and governments through direct
have an adverse impact market share coupled contact and membership of
on an airlines costs, with decline in growth industry organisations.
operational flexibility, opportunities.
marketing strategy,
business model and
ability to expand.
Airlines may be adversely Increased costs and Management monitors governments

affected by increases in reduced demand across proposals with regard to changes
Air Passenger Duty in the the airline industry which in planned approach to aviation
UK and its equivalent in may result in reduced taxation and engages with
other countries, and by profitability for Flybe. governments through direct
any future amendment contact and membership of industry
with regard to regulation Reduced demand organisations. Flybe seeks to pass
of emissions trading and for aviation across on additional duties to its passengers
other environmental the industry. through its pricing approaches.
laws and regulations,
or negative environmental Flybe continues to be compliant
perception of the airline with the ETS regime.
industry.
Flybe operates fuel-efficient aircraft
across its network and seeks to
develop further fuel efficiencies
through improvements in its
operational practices.

Corporate responsibility
Our people are our

most important asset
We are committed to ensuring that
we operate as a responsible business
for the benefit of all our stakeholders
Hazards resulting from our operations and activities are
Safety analysed and their risk assessed in order to eliminate,
mitigate or manage safety risks to acceptable levels
or better.
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, with
all incidents investigated objectively and thoroughly.
The Flybe Safety and Security Committee (SSC),

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 was chaired by
Alan Smith until August 2014. Alan Smith has
now passed the chair to Sir Timo Anderson.
The Flybe Safety Management System (SMS)

co-ordinates 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 is committed to developing, implementing, The SMS is reviewed on a monthly basis at the Safety
maintaining and constantly improving strategies and Action Group chaired by the Accountable Manager,
processes to ensure that all our aviation activities take Flybes Director of Operations, John Palmer (Luke
place under an appropriate allocation of organisational Farajallah from 1 April 2015). Actions from these
resources, aimed at achieving the highest level of meetings are reviewed at the quarterly Safety Review
safety performance, while delivering our services. Board chaired again by the Accountable Manager
and attended by the Operating Board.
Flybes Safety Policy recognises that safety is
everyones personal responsibility whether an Additional oversight is demonstrated through Flybes
employee, passenger, contractor, visitor or supplier membership of IATA and it has held the International
and is a primary responsibility of all managers and Operational Safety Audit (IOSA) accreditation since
employees. All levels of management and employees October 2007.
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.

Strategic report
Governance
2,069
Group employees at 31 March 2015
Compliance monitoring (quality assurance)

The establishment and maintenance of an effective Purple Heroes
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;
Other information
>>Approved Training Organisation; and
>>EASA Part M, aircraft continuing airworthiness.
The second team is dedicated to the MRO and covers:

>>Part 145, for an aircraft maintenance organisation;
>>Part 147, for an engineering licence type
training organisation; Richard Armitage
One of 88 Purple Heroes
>>Part 21G, for a production organisation; and that have been rewarded
>>Part 21J, for a design organisation. for going the extra mile.
Both the compliance monitoring managers have

a direct line of report to the Accountable Manager
who has overall responsibility for the safe operation Flybe has an ongoing employee
of Flybes activities under civil aviation legislation engagement programme The Purple Way.
in the UK. The purpose is to share the Groups vision
and strategy with all employees through
Health and Safety
Health & Safety is not about red tape and statistics. a series of connection workshops and
It is not separate from the day-to-day business. It is emotionally engage them on the journey
central to everything at Flybe, and there is absolutely the Company is on. This programme is
no compromise where Health & Safety is concerned.
reinforced by the Purple Heroes
Flybes goal is for zero avoidable accidents to its
workforce and customers. The Flybe Management recognition scheme which rewards
continues to demonstrate its commitment to health employees for going the extra mile.
and safety through proactive initiatives and close During the year, over 80 employees
liaison with staff and union safety representatives. have become Purple Heroes.
Managers undergo training in their roles and
responsibilities in relation to health and safety,
in order to be able to perform their responsibilities
accordingly.

continued
15.6kg
Health and safety is incorporated into the Flybe SMS
and overseen by the Flybe Health & Safety Committee,
which reports ultimately into the FSC. Flybe policy
for Health & Safety is defined in the Health & Safety
manual. In turn this shapes the procedures throughout Flybe UK fuel burn per seat
the organisation which define how the policy is (2013/14: 15.7kg)
implemented within each department. The policies
and procedures are drawn up with the full involvement
of the union safety representatives and Flybes HR Values
team, and are subject to oversight by the Flybe Health Flybe is committed to certain core principles. These
& Safety Committee. are expressed in its People Strategy or The Way We
Do Business that includes our START values.
People engagement
START values
S
Safety
No compromises
Teamwork
T One Flybe: collaboration
as a way of life
Alignment
A Acting with urgency and
embracing our goals and
The Purple Way
Responsibility
R
Flybe is only as good as the quality and engagement
of its people, who endeavour to deliver an excellent Take accountability
service to its loyal customers every day. The Companys and ownership
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 Transparency
very few airlines that enables many of its employees
to live where they work locally, within the regions. T Open, upfront, authentic
and sharing
In 2014 Flybe launched an employee engagement
programme called The Purple Way to align all
employees with the Companys strategy and
journey to become Europes Best Local Airline.
This engagement programme has been embedded
with a customer service training programme called
Flybe Loves Service, which we are aiming every
employee attend by the end of summer 2015.
During the year, in order to improve visibility and

communications each Director made at least seven
base visits and also spent time working on the shop
floor with front line colleagues.

Strategic report
Our people Ask Saad
Governance
Flybe continues to focus
on active two-way
communications with
its dispersed workforce.
During the year, four
CEO Ask Saad Town Hall conference
calls were held where all employees
had direct access to ask the CEO
and Operating Board questions
on any relevant topic. Ask Saad
complements regular email and
intranet updates, as well as consultations
As at 31 March 2015, Flybe employed 2,069 employees
across eight regional UK bases. Over 20% of our and negotiations through its
UK employees worked part-time or flexibly to recognised trade union partners.
balance their lifestyle needs and now over 64%
of our employees have more than five years service
and an average attendance rate of over 95%. Recent feedback:
Other information
Talent development
Flybes aim is to develop and promote talent internally I listen to this to keep up to date with current
and the Training Academy delivers the Groups thinking and issues. I think it is a positive
capacity to provide high quality training for both its initiative for senior managers to take the
own employees and those of third parties. This state- risk of being challenged and then providing
of-the-art facility has 26 classrooms, a simulator hall a response. It is, in my view, good for
with capacity for four aircraft simulators, cabin crew the Company.
simulator hulls for safety and refresher training, and
an engineering apprentice workshop. Qualifications
include a flight deck Multi-Crew Pilots Licence (under I enjoy listening to questions and answers
the first CAA-approved scheme for a UK airline), cabin from other areas of the business. Announcing
crew and customer service NVQs and engineering the latest Purple Heroes was a nice touch.
aircraft type approvals. Flybe already has students
engaged on the diploma in engineering, which after
Ask Saad is a good way of keeping those
four years will provide successful students with a
staff who are interested informed of what is
foundation degree level qualification, a BTEC and
diploma in engineering and a Part 66 engineering
happening with the Company. Having had a
licence. Flybe also continues to operate its Mentored couple of questions answered I was more than
Airline Pilot Scheme that part-sponsors pilot training happy with the response. Communicating with
through the provision of an interest-free loan as well staff in these difficult times is critical.
as maintaining its relationships with UK and European
flying schools for potential pilots.
I was very impressed with Ask Saad. Short
sharp communication about the state of the
Management development
To engage a dispersed workforce, line management
business. I feel you have got it right.
has been empowered to lead and the majority of our
people managers will be attending a Purple Managers Good format. Very much like the shout out
development programme during 2015. for Purple Heroes this time, and the way the
Op Board helped to answer questions in detail.
Flybes Operating Board has also introduced an annual
performance management system for non-crew staff
as well as an annual talent review and a succession
planning process as part of its commitment to
developing key talent.

continued
Benefits Human rights

Flybe aims to provide fixed and variable pay and short- Flybe operates entirely with staff employed in the
and long-term benefits (including insured benefits) EU and consequently has not developed a separate,
that, in the round, are affordable, competitive in the all encompassing human rights policy. Detailed policies
marketplace, performance-led and flexible. UK and procedures exist, among others, around:
employees have been able to participate in the Groups >>Equality and diversity see below
Share Incentive Programme (SIP) under which all
eligible employees were awarded 100 free shares >>Grievances
shortly after Flybes IPO and the Groups approved
>>Disciplinary procedures
Save As You Earn Scheme (SAYE) launched in 2011
and again in 2014. Flybe operates a Group Personal >>Whistle-blowing
Pension Plan (or equivalent in relevant territories) and
>>Harassment and bullying
over 90% of employees have elected to participate and
benefit from employers contributions to their personal >>Bribery.
fund. Flybe has salary sacrifice schemes to include
pensions and buying extra days off work and child-care In addition, Flybe uses its relationship with its
vouchers. employees to raise, air and resolve issues, whether
this is through Ask Saad, Open Channel or its
Employee communication established, recognised trade unions.
Flybe continues to focus on active two-way
communications with its dispersed workforce through Equality and diversity
line management. During the year four CEO Ask Saad Equality of opportunity and valuing diversity are
Town Hall conference calls were held where all central to the regional activities of Flybe and it aims
employees had direct access to ask the CEO and Board to ensure that all employment decisions are based
questions on any relevant topic. Ask Saad, which has on fairness and merit.
now become a bi-monthly event, complements regular
email and intranet updates, as well as consultations Applications for employment by an individual from
and negotiations through Flybes recognised trade any background, including disabled persons, are
union partners. Additionally, in the UK, Flybe uses always fully considered, bearing in mind the aptitudes
its consultative body known as Open Channel for of the applicant concerned. In the event of members
non-unionised staff. Open Channel meets quarterly, of staff becoming disabled, every effort is made to
is chaired by a member of the Operating Board and ensure that their employment with the Group continues
is attended by up to 25 elected representatives. and that appropriate training, career development
and promotion of disabled persons should, as far as
Flybe has started using surveys to seek feedback from possible, be identical to that of other employees.
staff. The first of these was initiated in Spring 2014
and the next is planned for Summer 2015. Managers
reviewed results with their teams and agreed actions
or areas to focus on to improve employees experience
of work. Year-on-year improvement will be sought
both in terms of level of participation and the actual
results themselves.
The breakdown of employees by gender is as follows:
31 March 2015 31 March 2014

Male Female Male Female
No. % No. % No. % No. %
Board 6 86 1 14 6 100 0
Senior management
(Flybe Leadership
Team) 27 84 5 16 32 80 8 20
All other employees
of the Group 1,155 57 875 43 1,117 58 797 42
Total 1,188 57 881 43 1,155 59 805 41

Strategic report
In this respect, Flybes policy continues to be to:
Community and charitable activities
>>Commit to a system for managing its environmental
impact in order to comply with all applicable current
Governance
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 cost-
efficient manner
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 procurement.
Flybe undertakes a number of community and
charitable activities. These are focused on supporting Management of buildings has incorporated, wherever
the local communities where the Company is based, possible, environmentally-friendly techniques such
as well as harnessing the fundraising power of as rainwater harvesting and a living roof on part
employees and customers. of the Flybe Training Academy site. There is also
a programme to replace light fittings in the offices
Flybe has sponsored a number of local community and hangars with LED lighting as luminaires
events and activities. These include: become unserviceable.
Other information
>>Shirt sponsor, Exeter City FC Aircraft impact upon the environment in two key areas:
>>Sponsorship, Exeter Chiefs Rugby Club locally to airports and over the course of a journey.
In 2007, Flybe introduced an Ecolabel rating for its
>>Sponsorship, Newquay AFC aircraft which was designed to provide customers with
a range of information regarding the noise and carbon
Flybes partnership with Cancer Research UK emissions for each flight. The label identifies the noise
celebrated its sixth anniversary in 2014/15. Since rating and also the carbon emissions made during the
launching the partnership the airline has raised over normal take-off and landing cycle of a flight as well as
500,000 for the charity. the carbon emissions for the total flight based on a
range of distances.
Environment
Flybe has, since the beginning, made a commitment
to environmental sustainability and operates one of
the most environmentally sensitive fleets in aviation
our goal has been and still is to reduce both noise
and emissions.
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 customers. Flybes aircraft, the Bombardier Q400
is one of the most environmentally efficient ways to
travel and we are proud to be at the forefront of the
aviation industrys efforts to reduce the environmental
impact of air travel. The Q400 aircraft is as fuel
efficient as an eco-friendly car on a per-passenger
basis and it produces emissions that are 30-40% lower
than other aircraft.

continued
Flybe supports initiatives which provide for an

Fuel usage and emissions 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 2015. Flybes GHG emissions data is intended
to comply with the reporting requirements of the
Climate Change Act 2008. Emissions include all data
Each Bombardier Q400 aircraft produces 30% to 40% reported from its sole operating subsidiary, Flybe
lower emissions on routes where it has replaced similar Limited, and 60% of data reported by our former joint
capacity, older generation aircraft or 50-seat jets. This venture partner, Flybe Finland to the end of October
equates to 6,000 to 8,000 fewer tonnes of CO2 in the 2014, using the financial control approach.
air every year for each Q400.
The information presented follows the 2013 UK
The airlines Flight Efficiency Programme, successfully Government environmental reporting guidance.
introduced in 2009, has resulted in a 13.4% reduction The Group has also adopted the GHG Protocol Value
over the average in-flight fuel burn before the Chain (Scope 3) Standard, but Flybe is not as yet able
programme was launched and continues to be a major to report on all categories that may be relevant. The
area of focus for the Company. The programme relies figures relate to the required elements of each Scope 3
on finely tuned strategies to reduce fuel consumption. category and some of the optional elements. 2013
These include lowering the aircrafts maximum UK Government Conversion Factors for Company
operational cruise speed by an average of 20 knots Reporting were used in converting activity data into
and optimising performance during each phase of carbon emissions.
flight (climb profile, approach from cruise altitude,
low speed descent and APU use). There are also Greenhouse gas emissions data for 2014/15
tankering strategies in place for refuelling from
the lowest cost vendor. 2014/15 2013/14
tCO 2 e tCO 2 e1
A further development has been the use of single Scope 1
engine taxiing across the fleet to both economise Aviation fuel 647,131 738,236
on fuel burn and lower emissions. Other fuels 611 701
Total Scope 1 647,742 738,937
While CO2 emissions are identified as the primary
Scope 2
contributor to global warming, other pollutants are
also harmful to the environment and have dedicated Electricity UK 2,225 2,241
limitations regulated by the International Civil Aviation Electricity overseas 104 203
Organisation (ICAO). Total Scope 2 2,329 2,444
Scope 3
Emissions Trading Scheme (ETS) Water supply and
Since the introduction of aviation into the European waste disposal 24 13
ETS on 1 January 2012, Flybe has complied fully Business travel air/car 610 492
with the requirements of the scheme to submit an Total Scope 3 634 505
independently verified report of its CO2 emissions
Gross and net emissions 650,705 741,886
and purchase equivalent carbon allowances under
the scheme to offset its carbon footprint. 1 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 CO2 .

Strategic report
Flybe and the Business Traveller
Governance
Our operations from London City are aimed at
the business traveller. We deliver cost effective
and timely travel from the heart of the capital to
the regions of Exeter, Edinburgh, Aberdeen and
Belfast. Our planes land only 25 minutes from
the premier business district of Westminster
and 12 minutes from Canary Wharf. Flying to
and from the capital via Flybe is faster than
road or rail and usually cheaper.
To stimulate business travel on Flybe flights,
we work closely with third party retailers, Global
Distribution Systems (GDS) and major corporate
organisations. We also work actively with travel
management companies, travel agents and
online booking tools to facilitate travel for
Corporates. Through our relationships with
Flybe is focused on the business traveller. these organisations, we ensure that our fares
Our network makes it easy for business people and flights are available to the business traveller
to travel between regions in order to meet through all key sales channels, whilst ensuring
customers, suppliers and colleagues. In addition, that our product continues to meet their needs.
flying to our hubs, particularly at Manchester
Other information
and Birmingham, the business traveller connects Our office locations include Exeter and
to the wider world through our partner network London. I have used Flybes services
we offer a true One Stop to the World.
many times, including to travel to
Our product is set up for business travel; Newcastle, Manchester, Scotland and
we offer multiple daily frequencies to the city Paris. They have really worked hard to
destinations most in demand, we are as per
the latest CAA figures, the most punctual of all
optimise the whole process, including
UK carriers who do more than 50,000 annual parking, security and the experience
flights, we allow the use of portable electronic on board, so that business travel is
devices in flight safe mode from gate to gate as efficient as possible. The time
and our aircraft has the preferred business seat
configuration of 2x2. savings are considerable and, all-in-
all, for locations on or near their route
network, its almost always the most
cost-effective mode of travel for me.
Ian Holyoak, Head of Commercial Law
at Michelmores LLP and a regular traveller
on business

continued
Specific exclusions:
>>Emissions from air conditioning and refrigeration London City Airport
units in office buildings excluded due to unavailable noise footprint
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 than 0.5% of total
of Scope 3 emissions.
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 Q400
measurement is emissions per passenger
Competing turbo prop
kilometre flown.
Competing jet
For 2014/15, which will be the starting base for
future comparisons, the Groups total emissions The Q400 turboprop is one of the quietest
per passenger kilometre were 133.3g/km. aircraft in the world, allowing it to service
some of the most noise-sensitive airports
Base year across the globe.
Flybe intends to have a fixed base year of 2014/15.
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 Bombardier Q400
base year recalculation is to recalculate the base
year and the prior year emissions for relevant
significant changes which meet its significance
threshold of base year emissions.
Selected
Rainwater harvesting Statistics:
Flybes state-ofthe-art Training Academy, based
in Exeter, has a rainwater harvesting system for
Engine: Pratt & Whitney PW150A
re-use within that building.
Speed: Top speed of 667km/h
Noise Faster than any turboprop
The Q400 is rightfully heralded as one of the quietest
passenger turboprop aircraft in the world. Inside the No of seats: 78
Q400, the revolutionary Active Noise and Vibration
Suppression system significantly reduces noise and Minimum leg room: 30
vibration, making it as quiet and comfortable as a jet. Noise footprint: The Q400 aircrafts noise
Outside, it is considerably quieter than jets with a
footprint is less than half the size produced
similar number of seats (10 decibels of Exterior
Perceived Noise quieter). by a similarly sized jet.
The aircrafts Noise and Vibration
Suppression (NVS) system reduces cabin
noise and up to 50% of the vibration.
Environment: The Q400 produces emissions
that are 30-40% lower than other aircraft.
Take off and landing CO2 emissions: 817kg
(Noise rating A)
Take off and landing CO2 emissions
(per seat): 10.5kg
Take off and landing air quality: 2kg

Chairmans statement on corporate governance
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
Governance
part of our corporate governance. The Board has
continued to develop during this financial year with
the appointment of a new CFO and three new
Non-Executive Directors. By the time of the AGM,
the entire board will have been refreshed since the
turnaround started with Saad Hammads appointment
in August 2013.
All Board recruitment has been with the help and

advice of leading executive search companies. Odgers
was used for the CFO and one Non-Executive Director
role and JCA for the other two Non-Executive Director
roles. We felt it important that at least one of the
Non-Executive Directors appointed was a woman.
Simon Laffin Another appointment was made, that of Sir Timo
Chairman Anderson, of someone with an extensive aviation
background, but no previous commercial board
experience. The Board is therefore a blend of
different backgrounds and experiences.
Our differentiated competitive focus,
reduced cost base, strong balance The Board has reviewed its own performance, taking
sheet and growth strategy give us account of the fact that it has been itself in transition.
The Non-Executive Directors have reviewed the
confidence in delivering a good result performance of both myself, as Chairman, and the
this year and in driving sustainable Chief Executive. All of these exercises resulted in
growth into the future. helpful input and ways to improve performance further.
Although not required to do so under the UK

Corporate Governance Code, all Directors will
Dear Shareholder again submit themselves for re-election at the
2015 Annual General Meeting (the AGM).
Flybe is committed to the highest standards of
corporate governance, and will endeavour to continue All shareholders are very much encouraged to attend
to meet these standards at all times. We believe in the AGM in July where the Directors will be available
working together to these standards, not just ticking to meet shareholders directly and to discuss any
boxes. Excellent corporate governance is, however, matters of importance to them. Additional materials
not an end in itself. It is a means to the end of achieving such as annual and interim reports, results and other
a high performing company that delivers value to its announcements are available via Flybes website at
stakeholders, while taking account of its responsibilities www.flybe.com/en/corporate/investors.
to the wider community.
The Strategic Report has been approved by the
The Boards primary objective in setting the remuneration Board on 9 June 2015.
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 Simon Laffin
of its shareholders, who are the prime beneficiaries Chairman
of such a strategy. We have taken note of shareholder
reaction to our last Remuneration Report, and have
further consulted major shareholders about changes
to the various incentive schemes this year.

Board of Directors
With the exceptions as noted below, all of the other

Directors, Company Secretary and Operating Board
members identified served throughout the year.
Executive Directors Non-Executive Directors
Saad Hammad Philip de Klerk Simon Laffin

Chief Executive Officer Chief Financial Officer appointed Non-Executive Chairman
appointed 1 August 2013 (aged 52) 19 August 2014 (aged 47) appointed 4 November 2013
Saad Hammad joined Flybe as Chief Philip de Klerk joined Flybe as Chief (aged 56)
Executive Officer on 1 August 2013. Financial Officer on 19 August 2014. Simon Laffin was appointed to
He has considerable airline He joined the Company from the Flybe Board as Non-Executive
experience having been Chief SABMiller, where he was Global Chairman in November 2013.
Commercial Officer of easyJet plc Head of Financial Planning & Mr Laffin is Chairman of Assura
from 2005 to 2009. Mr Hammad Analysis and Finance Director of the Group PLC, Chairman of the Audit
was a Non-Executive Director Business Capabilities Programme. Committee at Quintain Estates &
of Air Berlin plc and as of Prior to this, he was Chief Financial Development PLC and an adviser
25 April 2014, is a Non-Executive Officer of Ineos Olefins & Polymers to Dentsu Inc. Previously he was
Director of Pegasus, the leading Europe and spent 16 years at Group Finance and Property
Turkish low-cost carrier. He has Unilever in a variety of roles. Director at Safeway plc between
also held senior executive roles at 1994 and 2004 and he served as
a number of leading corporations, a Non-Executive Director at Aegis
including The Gores Group, Procter Group Plc, Mitchells & Butlers plc
& Gamble, Thorn-EMI, Vision and Northern Rock plc (as part of
Express and Tibbett & Britten. the rescue team), an adviser to CVC
Mr Hammad is a member of the Capital Partners, and Chairman of
Nomination Committee. Hozelock Group. Mr Laffin chairs
Flybes Nomination Committee and
sits on the Audit and Remuneration
Committees.
Other Executive and

Non-Executive Directors
who served but resigned
during the period are:
>>Andrew Knuckey
Chief Financial Officer
resigned 2 August 2014
>>Alan Smith
Non-Executive Director
resigned 31 July 2014
>>David Longbottom
resigned 31 July 2014

Governance
Charlie Scott Sir Timothy Anderson Liz McMeikan
Deputy Chairman and Independent Independent Non-Executive Independent Non-Executive
Non-Executive Director (aged 66) Director (aged 58) Director (aged 53)
Charlie Scott was formerly Sir Timo Anderson was appointed Liz McMeikan was appointed a
Chairman of William Hill plc from to the Board as Non-Executive Non-Executive Director in August
2004 until 2010. He is a chartered Director with effect from 2014. She is Senior Independent
accountant and was previously 1 May 2014. Sir Timo established Director at JD Wetherspoon plc
Chief Executive Officer at Saatchi the UK Military Aviation Authority and chairs the Remuneration
& Saatchi plc and Chairman of (the body responsible for military Committee at Unite Group plc.
Cordiant plc. Mr Scott has held aviation regulation and safety), Liz is also a Non-Executive Director
other non-executive positions, becoming its first Director General at Fresca Group, a 365m private
including with airport group from 2010 to 2013. Prior to that business, and Chairman of the
TBI plc. Mr Scott chairs Flybes Sir Timo was Assistant Chief of Air Moat Housing Association and a
Audit Committee and sits on the Staff, Royal Air Force. He served Non-executive Director at CH&Co
Nomination and Remuneration in the Royal Air Force from 1979 Group a 200m private company.
Committees. After nine years going on to hold senior command Liz spent her early career at
of service, Charlie Scott has appointments. Sir Timo has joined Colgate-Palmolive and then at
announced his intention to step the Safety and Security Committee, Tesco, establishing Tesco Express
down from the Board at the Annual and will chair that Committee and being appointed Stores Board
General Meeting in July this year. following Mr Smiths retirement Director for Change Management
from the Board. He has also joined and Human Resources.
the Nomination, Remuneration and Ms McMeikan chairs Flybes
Audit Committees. Remuneration Committee, and
sits on the Nomination Committee,
Safety and Security Committee
and Audit Committee.
David Kappler Between 1995 and 2004 he was

Senior Independent Non-Executive CFO at Cadbury Schweppes and
Director (aged 68) is a qualified accountant. After a
David Kappler was appointed to period of induction, Mr Kappler
the Flybe Board on 3 March 2015. will take over the role of Senior
Mr Kappler is Deputy Chairman Independent Director and Chair of
and Senior Independent Director the Audit Committee as, after nine
at Shire plc and a director of a years of service, Charlie Scott has
number of private companies. announced his intention to retire
Mr Kappler has previously served from the Board after the AGM in
as a Non-Executive Director at July 2015. Mr Kappler is a member
InterContinental Hotels Group, of the Remuneration and
Premier Foods, HMV and Camelot. Nomination Committees.

Operating Board
The Board is supported in its day-to-day running of the Group

by the Operating Board, which comprises (in addition to Messrs
Hammad and de Klerk) the following members, together with
dates appointed to the Operating Board if during 2014/15:
Operating Board
Paul Simmons John Palmer Luke Farajallah

Chief Commercial Officer Director of Operations (aged 52) Chief Operations Officer &
(aged 50) John Palmer joined Flybe in 2006 Accountable Manager appointed
Paul Simmons joined Flybe in as Director of Aviation Services and on 1 April 2015 (aged 47)
October 2013 from easyJet where, previously held senior management Luke Farajallah joined Flybe in 2015
for the last five years, he led roles in British Airways, Virgin from Bond Offshore Helicopters
their team in the UK as Director, Atlantic and Zurich Financial where he held the position of
UK Market. Prior to easyJet, Services. He was promoted to Managing Director. Luke was also a
Mr Simmons held senior Director of Airline Operations board member of the leading UK oil
commercial positions at Oberoi and Deputy COO in 2009 before and gas trade association, Oil & Gas
Hotels Group (EVP Sales & becoming, in 2011, Managing UK. Prior to that Luke held senior
Marketing) and IHG (Global VP, Director, Flybe Aviation Support. roles with British Airways (where his
InterContinental Brand) and a Appointed as Director of career spanned 17 years), easyJet
variety of marketing roles at Procter Operations in August 2013, (where he was the Regional General
& Gamble, S.C. Johnson, Helene Mr Palmer was responsible for all Manager for the UK), Wizz Air, as
Curtis/Unilever and Kelloggs. Paul aspects of the Flybes operations, Chief Operating Officer, and more
reports to Saad Hammad, CEO. including Flybe Finland Oy, and was recently roles in Spain with Spanair
a member of the Safety and as COO, and with Volotea. Luke
Security Committee. Mr Palmer reports to Saad Hammad, CEO,
resigned from the Company on and is also a member of the Safety
31 March 2015 and Luke Farajallah and Security Committee.
took over as Chief Operations
Officer on 1 April 2015 (see below).
Other Operating Board Directors

who served but resigned during
the period are:
>>Matt Linsey
Acting Director of IT
1 December 2014.
The responsibilities for IT were
added to Mr de Klerks role
of CFO on 1 December 2014

Governance
Simon Charles Matt Bennett Annelie Carver
Director of Human Resources and Director of Fleet, Procurement General Counsel & Company
Health and Safety (aged 48) and Corporate Development Secretary appointed 23 June
Simon Charles joined Flybe in appointed 10 October 2013 2014 (aged 38)
January 2007 from RHM Plc (aged 39) Annelie Carver, a qualified solicitor,
where he was Group Director Matt Bennett, a Chartered joined Flybe in June 2014 as
of Organisation and People Accountant, joined Flybe in General Counsel and Company
Development and part of the January 2012 as Director of Internal Secretary. Ms Carver was the first
management team involved in the Audit, Risk and Special Projects. in-house lawyer at Flybe and set up
initial public offering of shares in In February 2015, Mr Bennett took the legal team at Flybe. Ms Carver
RHM plc. He has spent 25 years in over the role of Director of Fleet, is also the Company Secretary for
human resources within significant Procurement and Corporate Flybe Group plc and its subsidiary
companies having been European Development. Mr Bennett has companies, the Audit Committee,
HR Director at Quaker Inc. and held commercial auditing experience Nomination Committee and the
management positions with having led the audit function for Remuneration Committee. Prior
PricewaterhouseCoopers, Pepsico four years at the Rank Group PLC, to joining Flybe, Ms Carver was
Inc. and Unilever plc. Mr Charles and more recently for six years in a partner in the corporate and
was a member of the Safety and a joint Director of Financial Control commercial department at
Security Committee. Mr Charles and Audit role for Sony Computer Michelmores solicitors. Ms Carver
resigned from the Company on Entertainment (Sony PlayStation). has resigned and will be leaving
1 April 2015. The responsibilities Mr Bennett reports to Saad Flybe on 3 September 2015.
for Human Resources were added Hammad, CEO.
to Mr de Klerks role of CFO on
1 April 2015 and the responsibilities
for Health and Safety were added
to Mr. Farajallahs role of COO on
1 April 2015.

Corporate governance
Group Board
Audit Nomination Remuneration Safety & Security

Committee Committee Committee Committee
Charlie Scott (Chair) Simon Laffin (Chair) Liz McMeikan (Chair) Timo Anderson (Chair)
Simon Laffin Saad Hammad Simon Laffin Simon Charles
Timo Anderson Charlie Scott Charlie Scott John Palmer
Liz McMeikan Liz McMeikan Timo Anderson Liz McMeikan
David Kappler Timo Anderson David Kappler Alison Millborough
David Kappler Ian Baston
Tim Swarbrick
Ian Holder
Lee McConnellogue
This report sets out how the Company applied the The Board
principles of the UK Corporate Governance Code Structure and leadership
issued by the Financial Reporting Council in September At 31 March 2015 the Board comprised seven Directors,
2012 (the Code) in the year to 31 March 2015. of whom five are Non-Executive and two are Executive.
A copy of the Code can be found at www.frc.org.uk/
corporate/ukcgcode. The Financial Conduct Executive Directors
Authoritys Listing Rules require the Company to Saad Hammad
set out how it has applied the main principles of the Chief Executive Officer
Code and to explain any non-compliance. Philip de Klerk
Chief Financial Officer
Statement of compliance
The Board is committed to maintaining high standards Non-Executive Directors
of corporate governance and has fully considered the Simon Laffin
provisions of the Code. The Board considers that the Non-Executive Chairman
Company is a smaller company for the purposes Charlie Scott
of the Code which defines this as a company which Deputy Chairman and
has been below the FTSE350 throughout the year Independent Non-Executive Director
immediately prior to the reporting year. Throughout Timo Anderson
the year ended 31 March 2015, and up to the date of Independent Non-Executive Director
approval of this Annual Report, the Board considers Liz McMeikan
that it and the Company have complied with the best Independent Non-Executive Director
practice provisions set out in the Code as it applies David Kappler
to smaller companies. Senior Independent Non-Executive Director
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.

The Board is led by the Chairman, Simon Laffin, The Directors biographies appear on pages 42 and 43
who is responsible for ensuring its effectiveness in and illustrate the range of experience which ensures an
all aspects of its role. The Boards key purpose is to effective Board to lead and control the Group. Further
provide the leadership and vision necessary to ensure details of changes to the membership of the Board
Governance
the Companys prosperity by collectively directing are given on page 49. The size of the Board represents
the Companys affairs while meeting the appropriate an appropriate combination of executive and
interests of its shareholders and stakeholders. non-executive directors for the size of the business
In addition to business and financial issues, the and allows individuals to communicate openly and
Board of Directors must deal with challenges and freely and to contribute through the exercise of their
issues relating to corporate governance, corporate personal skills and experience. The Directors have
social responsibility and corporate ethics. It has the a complementary range of financial, commercial,
ultimate responsibility for setting the Companys operational and entrepreneurial experience which,
overall strategy and long-term direction and applies in the opinion of the Board, provides it and its
governance within a framework of effective controls Committees with the necessary balance of skills,
which permit risk to be assessed and managed. diversity, independence and knowledge of the Group
The Board has responsibility for approving the to enable them to discharge their respective duties
Financial Statements, significant acquisitions and and responsibilities effectively.
disposals, major non-recurring projects and major
capital expenditures.
During the year the Board considered:
Board composition
and membership
Monthly results
Committee
Budgets and performance
forecasts and membership
Annual and Risk management
half year results
announcements Engagement
with investors
FINANCIAL Insurance cover
GOVERNANCE
PERFORMANCE
DAY-TO-DAY CASH
ACTIVITIES POSITION
Cost control
Capital
expenditure Exit of Finland
Resource Short-term
allocation cash forecasts
Organisational
structure

The Non-Executive Directors have been appointed of each Board and Committee meeting. These include
on merit and for their specific areas of expertise regular business progress reports, budgets, financial
and knowledge. Their wide-ranging experience and statements and shareholder information. The Company
backgrounds ensure that they are able to challenge Secretary manages the provision of information to the
and debate matters constructively both in relation Board in consultation with the Chairman.
to development of strategy and performance against
objectives set by the Board. The Board held six scheduled meetings during the year.
In addition the Board met on several occasions on an
The Company has governance procedures in place to ad hoc basis to deal with urgent business, including
ensure that, on resignation, concerns, if any, raised by the consideration and approval of transactions where
an outgoing Non-Executive Director are circulated by a decision was required before the next meeting.
the Chairman to the remaining members of the Board.
None of the Directors who resigned during the year The Board requires all Directors to devote sufficient
have raised concerns. time to their duties and to use their best endeavours
to attend meetings. The table on page 49 details the
Key activities of the Board Directors attendance at the scheduled Board and
Aside from day-to-day management issues, the Board Committee meetings during the year.
has focused on resolving some major legacy issues:
>>Exited
Independence
the loss-making joint venture with Finnair
The Board considers each of its Non-Executive
>>Exited, without any penalties, the $892m obligation Directors to be independent in character and
to buy 24 additional E175 jets from Embraer judgement and no one individual, or group of
with a simultaneous agreement to secure young, individuals, dominates the Boards decision making.
attractively priced turboprop Q400s
Each of the Non-Executive Directors who served
>>Signed landmark deal with Bombardier to upgrade
during the year has been identified as independent
the reliability of Flybes 45 Q400 aircraft
on the basis of the criteria specified in paragraph A.3.1
>>Found solutions through Project Blackbird for seven of the Code and, generally, is free from any business
of the surplus 14 E195 jets including a new agreement or other relationship which could materially interfere
with Cardiff Airport utilising two of these. with the exercise of their independent judgement.
In addition, the Board has supported the management Diversity

team in its first year of the three year turnaround, All recruitment for the Board is led by the Nomination
in which the underlying performance of the business Committee. We recognise that diversity, in its widest
has significantly improved. sense, is important for the Boards effectiveness.
However, the Non-Executive Directors have been
Operation of the Board appointed on merit alone and specifically for their
In carrying out its work, the Board focuses on key contributions from their knowledge and experience.
tasks, which include receiving reports on safety, Their wide-ranging experience and backgrounds
security and health, business risks, long-term strategy, ensure that we can debate matters in relation to both
the Groups trading performance, the work of its the development of strategy and performance against
committees and the actions of the Operating Board the objectives set by the Board. We believe that the
and senior management. The Board delegates specific diverse backgrounds of the individual Directors ensure
responsibilities, with written terms of reference, we have a Board with the optimum combination of
to its Committees, details of which appear below. skills and experience needed to support the business.
The Executive Directors of the Company may attend As a result, no targets have been established for the
meetings of the Committees at the invitation of the composition of the Board, whether in terms of racial
respective Chairmen. background or gender.
The Executive Directors review and discuss with the Overall information on the gender diversity of the
Board all strategic projects and all material matters Board and the Group as a whole is given on page 36.
currently or prospectively affecting the Group and its
performance. The Board delegates its authority for Conflicts of interest
executive management to the Chief Executive Officer, In accordance with the Companies Act 2006, the
who leads the Operating Board, subject to monitoring Companys Articles of Association permit the Board
by the Board and those items referred to above. to consider and, if thought fit, to authorise actual or
potential conflicts of interest which may arise and to
To enable the Board to function effectively, and to impose such limits or conditions as it thinks fit. The
assist the Directors to discharge their responsibilities, Board has established a formal procedure whereby
a comprehensive set of papers is provided in advance actual and potential conflicts of interest can be

Attendance at Board and Committee meetings
Directors in office as at 31 March 2015
Safety and
Governance
Audit Nomination Remuneration Security
Year ended 31 March 2015 Board Committee Committee Committee Committee
Executive Director
Saad Hammad 9/9 n/a 3/3 n/a n/a
Philip de Klerk 6/6 n/a n/a n/a n/a
Simon Laffin 9/9 6/6 n/a 4/4 n/a
Timo Anderson 8/8 5/5 1/1 3/3 4/4
Charlie Scott 9/9 6/6 3/3 4/4 n/a
David Kappler 1/1 1/1 n/a n/a n/a
Liz McMeikan 6/6 4/4 1/1 3/3 n/a
Former Directors who served during the year

Safety and
Audit Nomination Remuneration Security
Year ended 31 March 2015 Board Committee Committee Committee Committee
Executive Director
Andrew Knuckey 3/3 n/a n/a n/a n/a
David Longbottom 3/3 n/a 2/2 1/1 n/a
Alan Smith 3/3 n/a 2/2 1/1 n/a
recorded by each Director and authorised by the >>approving the Groups long-term objectives
Board. The decision to authorise a conflict can only be and strategy
made by non-conflicted Directors (those who have no >>approving the Groups annual operating and
interest in the matter being considered) and in making
capital expenditure budget
such a decision the Directors must act in a way they
consider in good faith will be most likely to promote >>Group financial reporting and controls including the
the Companys success. approval of interim and final financial statements,
interim management statements and dividends
Directors indemnity and insurance cover
>>ensuring a sound system of internal controls
In accordance with the Companys Articles of
and risk management
Association, throughout the year the Directors have
been, and continue to be, indemnified to the fullest >>decisionsrelating to acquisitions, disposals
extent permitted by law. Appropriate Directors and and major items of capital expenditure
Officers liability insurance cover is arranged and
>>Board and Committee membership and
maintained via the Companys insurance brokers,
Willis, and its terms are reviewed annually. succession planning
>>remuneration
Matters reserved for the Board
>>corporate governance matters
The Board has approved a schedule of matters
reserved for decision by it. This schedule is available >>approving certain of the Groups policies
for inspection at the Companys registered office and
on the Companys website at www.flybe.com/en/ Matters requiring Board approval are generally
corporate/governance. The matters reserved for the subject of a proposal by the Executive Directors
specific approval by the Board can be subdivided into submitted to the Board, together with supporting
a number of key areas including but not limited to: information, as part of the Board, or Committee,
>>reviewing
the Groups overall safety and security papers circulated prior to the relevant meeting.
arrangements

continued
Board performance and evaluation by the Chief Executive Officer and comprises the Executive
The Board has considered and supports the Directors together with the Chief Commercial Officer,
Codes provisions on Board performance evaluation. Director of Operations, Director of Human Resources
A self-evaluation of the Board took place within the and Health and Safety, and Director of Strategic
period. The Non-Executive Directors meet regularly Procurement. It has responsibility for implementing on
without the Executive Directors present, and have also a day to day basis the strategy that has been agreed by
carried out a performance evaluation on the Chairman the Board. Operating Board members report regularly
within the period. to the Board on key issues. The structure of the Boards
as at 31 March 2015 was as on page 51.
Induction and continuing development of Directors
All new Directors receive a tailored induction on joining Board Committees
the Board, including meetings with senior management In accordance with the principles laid down in the Code,
and advisers and visits to major operating bases and the Board has established a Committee structure to
locations. The Chairman and Chief Executive Officer assist in the discharge of its responsibilities. Details
are responsible for reviewing the development needs of each of the Audit, Nomination, Remuneration, and
of individual directors. All the Non-Executive Directors Safety and Security Committees, and the members,
have, during the course of the year received updates roles and activities thereof are detailed below. Each
on best practice in audit and remuneration and other Committee reports to, and has terms of reference
issues, as well as bringing knowledge and information approved by, the Board, which are available for review
gathered from their other business interests. on Flybes website at www.flybe.com/en/corporate/
governance or on request from the Company Secretary.
All Directors have access to the advice and services The minutes of the meetings of the Committees, where
of the Company Secretary who is responsible to the appropriate, are circulated to, and reviewed by, the
Chairman on matters of corporate governance and Board. Biographies of each Board member are set out
provides the Board with updates on relevant legislation, on pages 42 and 43.
regulations and governance best practice. The Directors
may, at the Companys expense, take independent Audit Committee
professional advice where necessary and appropriate The role of the Audit Committee is to provide formal
to do so. and transparent arrangements for considering how
to apply the financial reporting, risk management
Directors election and re-election and internal control principles set out in the Code,
All Directors will retire at the forthcoming AGM and, and to maintain an appropriate relationship with the
being eligible, will offer themselves for re-election. Companys auditor.
A biography for each of these Directors, together with
a description of the skills and experience they possess Members of the Audit Committee can, where they
that the Company considers relevant, will be included judge it necessary to discharge their responsibilities,
in the proposals put to shareholders at the 2015 AGM. obtain independent professional advice at the
Companys expense.
None of the Non-Executive Directors has served more
than nine years in office other than Charlie Scott who The Audit Committee held six scheduled meetings
will be retiring as a Non-Executive Director at the AGM during the year. The attendance of the individual
this year. members at meetings is detailed in the table on
page 49.
Any changes to the commitments of any Director are
always considered by the Board to ensure they will The current members of the Audit Committee are
continue to have sufficient time to enable them to fulfil Charlie Scott (Committee Chairman), Simon Laffin, Liz
their duties with the Company. The Board is satisfied McMeikan, Timo Anderson & David Kappler. Alan Smith
that all of the Directors continue to perform effectively resigned during the year. The Group Company Secretary
and demonstrate commitment to their roles, including acts as Company Secretary for the Audit Committee.
commitment of time for Board and Committee meetings
and any other duties which may be undertaken by them Charlie Scott, a Chartered Accountant, chaired the Audit
from time to time. Committee throughout the year. After 9 years of service,
Charlie Scott has announced his intention to retire from
Operational management of the Group the Board at the Annual general meeting in July this
Beneath the Board there is in place a clear and year. David Kappler will then take on the role of Chair
appropriate apportionment of responsibilities amongst of the Audit Committee from Charlie Scott. The Board
the senior managers designed to ensure that the considers he has the appropriate recent and relevant
business can be managed and monitored effectively. experience to enable him to fulfil this role. In addition,
Senior managers report to the Operating Board which Simon Laffin, who is also a qualified accountant, serves
in turn reports to the Board. The Operating Board is led on the Audit Committee. The Code permits smaller

Group Board
(chaired by Simon Laffin)
Governance
Operating Board
(chaired by Saad Hammad)
HR and
Strategic
Commercial Operations Finance & IT Health & Legal
Procurement
Safety
Paul Simmons John Palmer Philip de Klerk Simon Charles Annelie Carver Matt Bennett
companies to have an Audit Committee comprising from the Chairman, Chief Executive Officer and the
a minimum of two independent Non-Executive Directors Director of Human Resources. No Director is involved
and the Board is satisfied that Flybe is a smaller in decisions relating to their personal remuneration
company for this purpose. The Board is satisfied that package.
the members of the Audit Committee are those who
are best able to contribute to its objectives. The Remuneration Committee and the Group also
received advice from Kepler Associates and FIT
Further details about the Audit Committee can be found Remuneration Consultants, two firms of independent
on pages 54 to 57. remuneration consultants who have not provided any
other services to the Group.
Remuneration Committee
The current members of the Remuneration Committee The Committee should carry out the duties below for
are Liz McMeikan (Committee Chairman), Charlie Scott, the Company, major subsidiary undertakings and the
Simon Laffin, David Kappler and Timo Anderson. Group as a whole, as appropriate.
David Longbottom (previous Committee Chairman)
and Alan Smith resigned during the year. Charlie Scott The Committee shall:
will step down as a Committee member at the AGM >>determine and agree with the Board the framework
on 22 July 2015.
or broad policy for the remuneration of the Chief
Executive Officer, all other Executive Directors, the
The Remuneration Committee held four scheduled
Chairman of the Company and such other members
meetings during the year. The attendance of the
of the executive management as it is designated
individual members at meetings is detailed in the
to consider by the Board. The remuneration of
table on page 49.
Non-Executive Directors shall be a matter for the
executive members of the Board, within the limits
The Remuneration Committees purpose is to advise
set by the articles of association. No Director or
the Board and make recommendations to it about all
manager shall be involved in any decisions as to
elements of the remuneration packages of the Executive
his or her own remuneration. In order to ensure his
Directors and consult with the CEO on the remuneration
independence, the Committee shall also review and
of Operating Board members and any major changes
recommend to the Board the remuneration of the
in employee benefit structures throughout the Group.
Company Secretary;
The Company Secretary acts as secretary of the >>in determining the remuneration policy, take into
Remuneration Committee. account all factors which the Committee deems
necessary including relevant legal and regulatory
The Groups compliance with the provisions of the Code requirements, the provisions and recommendations
relating to directors remuneration is further explained of the UK Corporate Governance Code and associated
on pages 61 to 79. guidance. The objective of the policy shall be to
promote the long-term success of the Company.
The Remuneration Committee may request relevant Performance elements should be transparent,
Executive Directors and senior management to attend stretching and rigorously applied. Remuneration
meetings by invitation. During the year under review, incentives should be compatible with risk policies
the Committee received material assistance and advice and systems;

continued
>>liaisewith the Nomination Committee to ensure that >>work with the Companys Audit Committee and/or
the remuneration of newly appointed executives is Committees independent advisers in evaluating
within the Companys overall policy; performance criteria;
>>when setting remuneration policy for directors, review >>usea consistent approach to performance
and have regard to the remuneration trends within the measurement and explain in the Remuneration
Companys sector and with regard to remuneration Report how this is achieved;
levels across the Group (especially when determining >>where appropriate, design and invoke appropriate
fixed or variable pay opportunity increases);
safeguards such as withholding and recovery in
>>review the ongoing appropriateness and relevance relation to all performance-related pay to ensure
of the Remuneration Policy; payments reflect required achievements and targets;
>>within the terms of the agreed policy and in >>approve share ownership and retention policies
consultation with the chairman and/or Chief for Executive Directors and Operating Board
Executive, as appropriate, determine the total members; and
individual remuneration package of the Chairman, >>approve remuneration arrangements and payments
each Executive Director and the Company Secretary
only within the terms of the Remuneration Policy or as
including bonuses, incentive payments and share
separately approved by the Companys shareholders.
options or other share award scheme;
>>obtain reliable, up-to-date information about The Remuneration Committee is authorised by the
remuneration in other companies. To help it fulfil its Board to:
obligations the Committee shall have full authority to >>be exclusively responsible for establishing the
appoint remuneration consultants and to commission
selection criteria and then for selecting, appointing
or purchase any reports, surveys or information which
and setting the terms of reference for any
it deems necessary, within any budgetary restraints
remuneration consultants providing advice to the
imposed by the Board;
Remuneration Committee, at the Companys expense;
>>be exclusively responsible for establishing the >>to obtain, at the Companys expense, expert legal
selection criteria, selecting, appointing and setting
or other professional advice where necessary in the
the terms of reference for any remuneration
course of its activities.
consultants who advise the Committee;
>>approve the design of, and determine targets for, any Nomination Committee
performance-related pay schemes (both short- and The current members of the Nomination Committee
long-term) operated by the Company and approve are Simon Laffin (Committee Chairman), Saad Hammad,
the total annual payments made under such schemes; Charlie Scott, Liz McMeikan, Timo Anderson and David
>>review
Kappler. Charlie Scott will step down as Committee
the design of all share incentive plans for
member at the AGM on 22 July 2015.
approval by the Board and shareholders. For any
such plans, determine each year whether awards
The Nomination Committee held three scheduled
will be made, and if so, the overall amount of such
meetings during the year. The attendance of the
awards, the individual awards to Executive Directors,
individual members at meetings is detailed in the
Company Secretary and Operating Board members
table on page 49.
and the performance be used;
>>determinethe policy for, and scope of, pension The Nomination Committees purpose is to establish
arrangements for each Executive Director; a formal, rigorous and transparent procedure for
the appointment of new directors to the Board.
>>ensure that contractual terms on termination, and
The Company Secretary acts as secretary of the
any payments made, are fair to the individual, and
Nomination Committee.
the Company, that failure is not rewarded and that
the duty to mitigate loss is appropriately recognised;
The Code recommends that the majority of members
>>oversee any major changes in employee benefits of the Nomination Committee should be independent
structures throughout the Company or Group; Non-Executive Directors. Throughout the period
the Nomination Committee has comprised Charlie
>>agreethe policy for authorising claims for Scott, Simon Laffin and Timo Anderson who are
expenses from Directors; all Independent Non-Executive Directors. David
>>consult with the executive management in Longbottom and Alan Smith resigned as Committee
setting levels of remuneration for the Operating Members during the period. Liz McMeikan and David
Board members; Kappler, both Non-Executive Directors, were appointed
to the Companys Nomination Committee during the
year. Saad Hammad also continues to serve on the

Committee. The Board is satisfied that the members Allison Milborrow, Ian Baston, Tim Swarbrick, Ian
of the Nomination Committee are those who are best Holder and Lee McConnellogue. Individual post holders
able to contribute to its objectives. are requested to attend as required. The Safety and
Security Committee met on four occasions during the
Governance
The responsibilities of the Nomination Committee year. The attendance of the individual Board members
include: at meetings of the Safety and Security Committee is
>>regularly
detailed in the table on page 49.
reviewing the structure, size and composition
(including skills, knowledge, experience and diversity)
The Safety and Security Committees purpose is to
of the Board and making recommendations to the
establish, review and monitor formal policies and
Board with regard to any changes;
procedures and have oversight of performance in
>>keeping under review the leadership needs of the connection with the safe and secure operation of
organisation, both executive and non-executive, the Groups business.
with a view to ensuring the continued ability to
compete effectively in the marketplace; The duties of the Safety and Security Committee
include:
>>evaluating, before any appointment is made
by the Board, the balance of skills, knowledge, >>review all matters concerned with the safe and
experience and diversity on the Board and in light secure operation of any aircraft operated by the
of this preparing a description of the role and Group, or joint venture partners operating under
capabilities required for a particular appointment; Flybe Group PLCs Air Operator Certificate, in
the air or on the ground; assure that appropriate
>>givingfull consideration to succession planning for
procedures and processes are in place; encourage
Directors taking into account the challenges and
an open reporting culture.
opportunities facing the Company and the skills
and expertise needed on the Board in future; and >>consider, and if necessary call for, reports on
incidents, including accidents, involving any aircraft
>>reviewing the time requirements of Non-Executive
operated by the Group, its franchisees or partners
Directors.
or joint venture partners. In cases involving the
Groups aircraft, the Committee will assure that
The Board fully supports diversity, recognising the
appropriate and recommended remedial action
benefits that diverse viewpoints can contribute in
is taken, and in any other cases, that appropriate
decision making. All Directors are committed to
recommendation are made to, and implemented
encouraging all of the Groups employees, and its
by, relevant third parties;
Board, to reach their full potential, irrespective of
their gender, race, or sexuality. It is the intention of >>consider, and if necessary call for, reports on
the Board to always keep the benefits that derive from significant incidents concerning safety at airports
a diverse Board in mind when making appointments. and in engineering facilities and ensure remedial
However, the Board does not believe that setting a action or appropriate recommendations are
quota is the most appropriate method for achieving implemented;
a balanced Board and all appointments are made on >>assure compliance with airworthiness
merit. The Board remains committed to developing
requirements and meet with the relevant
talent throughout the Group, and to providing training,
authority on an annual basis;
support and development to those identified as
displaying potential. >>assure compliance with health and safety
legislation in all relevant jurisdictions through
The terms and conditions of appointment of all regular audit reports;
of the Non-Executive Directors are available for >>assure that security advice received from relevant
inspection at the Companys registered office during
national agencies and authorities is given full and
normal business hours, and at the AGM. Each letter
timely attention, and acted on as appropriate;
of appointment sets out clearly what is expected in
the role, the anticipated level of time commitment >>ensure an annual safety and security report
including, where relevant, additional responsibilities is published.
derived from involvement in Board Committees.
Details of other material commitments are disclosed In addition to the updates provided to the Board
to the Board and a register is maintained by the after each Safety and Security Committee meeting,
Company Secretary. the Committee produces an annual report which is
reviewed and formally approved by the Board. Details
Safety and Security Committee of substantial interests are disclosed in the Directors
The members of the Safety and Security Committee report on page 59.
as at 31 March 2015 were Timo Anderson (Committee
Chairman), Simon Charles, John Palmer, Liz McMeikan,

Audit Committee report
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 reviewing any significant
financial reporting issues and/or judgements
contained therein;
>>keeping 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 they relate to audit
Charlie Scott matters or risk management;
Chairman Audit Committee
>>considering managements response to any major
external or internal audit recommendations;
>>reviewing the effectiveness of the Groups internal
Dear Shareholder controls and risk management systems;
The past year has been a busy one for the Audit >>monitoring the effectiveness of the external audit
Committee at Flybe with our focus being on the process including the appointment, cost and
Groups control environment and managements independence of the external auditor see
reporting of Flybes financial performance. We have Auditor Independence on page 81;
maintained our oversight assisted by the work of the >>developing and implementing policy on the
internal and external audit teams, with whom our engagement of the external auditor to supply
healthy and constructive relationship continues. non-audit services;
The Committee now comprises five members, with >>ensuring that clear and effective channels are
changes in the year being Alan Smith standing down maintained for communication between the external
as a Non-Executive Director in August 2014 and auditor and both the Audit Committee and the
the appointment to the Committee of Liz McMeikan Groups financial and senior management.
and David Kappler bringing with them a wealth of
experience from different business sectors. We would The Audit Committee undertakes its activities in line
like to thank Alan for his excellent support during his with an annual work plan designed to ensure that it
time serving on the Committee. meets its responsibilities under its terms of reference
set by the Board. The Audit Committee agrees the
Role scope of the external audit work and discusses the
The primary function of the Audit Committee, which results of the full year audit and half year review with
met on three occasions during the year, is to assist the external auditor, the Chief Financial Officer and
the Board in fullling its oversight responsibilities. Chief Executive Officer. The ultimate responsibility
This includes reviewing the nancial reports and other for reviewing and approving the annual and other
nancial information before publication. In addition, accounts remains with the Board, however the Audit
the Committee also reviews the systems of internal Committee reviews these documents and discusses
controls on a continuing basis, with respect to nance, them with the Chief Executive Officer and the Chief
accounting, risk management, compliance, fraud and Financial Officer, particularly areas where there are
audit that management and the Board have established. subjectivity or the application of judgement, before
making recommendations to the Board.
The Committee also reviews the accounting and
nancial reporting processes; along with reviewing The Audit Committee has responsibility for
the roles and effectiveness of both the internal and recommending the appointment, re-appointment
external auditors. The ultimate responsibility for and removal of the external auditor to the Board who,
reviewing and approving the annual and other in turn, will propose a resolution for consideration by
accounts remains with the Board. the shareholders.

Membership and attendees Review of the Annual Report
The Audit Committee met on three occasions during The Committee examined, at the request of the Board,
2014/15. Details of the attendance at its meetings are the Annual Report to determine whether it was fair,
set out in the table on page 49. balanced and understandable. The Committee did this
Governance
by reviewing it in detail itself, gaining an understanding
The Chief Executive Officer, Chief Financial Officer, of the drafting and preparation process and the level of
Group Financial Controller, Head of Internal Audit, and review and challenge introduced to ensure balance and
representatives from the external auditor are invited to accuracy. After its review of the process, consideration
attend all meetings of the Audit Committee. The Head of management and auditor papers on the Financial
of Internal Audit and the external auditor may also Statements and the Annual Report, and its own review
request a meeting with the Audit Committee without of the Annual Report, the Audit Committee concluded
any member of management present if they consider that the Annual Report was fair, balanced and
it necessary. In line with its terms of reference, the understandable and recommended that the Board
Audit Committee members met with the external approve it on those terms.
auditor once during the year without management
present. Matthew Bennett, previously Director of Internal control and risk management
Internal Audit, Risk and Special Projects, moved to The Group has a clear internal control system, the
a new role within Flybe, remaining on the Operating purpose of which is to safeguard investment and
Board, as Director of Fleet, Procurement and Corporate the Groups assets, which accords with the Financial
Development on 1 April 2015. Duncan Worthington, Reporting Councils publication Internal Control: the
current Audit Manager, will become Head of Audit and Revised Guidance for Directors on the Combined Code
Risk with immediate effect reporting to Philip de Klerk (the Revised Guidance) which can be accessed at
and with a dotted line to Charlie Scott, Chairman of the www.frc.org.uk. The Board has overall responsibility
Audit Committee. for maintaining and reviewing the effectiveness of
the Groups systems of internal control which covers
Main activities of the Committee during the year financial, operational and compliance controls together
During the year the Audit Committees business has with risk management systems. The responsibility for
included the following items: establishing and operating detailed control procedures
>>reviewing
lies with the CEO supported by the Operating Board.
trading updates and interim
However, the internal control systems are designed
management statements;
to manage, not eliminate, the risk of failure to achieve
>>approving policy for use of professional financial business objectives and to provide reasonable but not
services firms (including auditors on non-audit absolute assurance that assets are safeguarded against
assignments); unauthorised use or material loss, and that transactions
are properly authorised and recorded.
>>fullyear results, including review of the Annual Report
to ensure it is fair, balanced and understandable;
The Audit Committee approved the annual Internal
>>principal
judgemental accounting matters affecting Audit and Risk Plan, designed to provide effective risk
the Group based on reports from both the Groups based coverage over the internal control environment,
management and the external auditors; for the coming year. The key objectives of the Internal
Audit and Risk department are to provide independent
>>external audit plans and reports; and objective business assurance to the Board based
>>reviewing reports from the Head of Internal Audit; on its approved risk based audit plan.
>>approval of the annual Internal Audit and Risk Plan; In addition, the Audit Committee considers the report
>>reviewing internal controls, policies and procedures; prepared by Deloitte LLP highlighting any matters
identified in the course of its statutory audit work,
>>reviewing of the Companys Whistleblowing policy; which is reviewed by the Audit Committee in the
>>review of compliance with the Bribery Act 2010 presence of Deloitte LLP, Chief Executive Officer,
the Chief Financial Officer and the Director of Internal
>>approving the Treasury Policy; Audit and Special Projects.
>>reviewing the changes to Corporate Governance;
>>promoting Risk Management, through a risk-based
audit plan allowing reaction to newly identified risks
as they arise.

Audit Committee report
continued
Review of business risk and its reporting in the The purpose of these workshops has been to review
Financial Statements enterprise-wide the likely risks to business objectives so
The principal risks and uncertainties facing the that the Board can update its understanding of how well
business are discussed on pages 28 to 31. The Board risks are understood and managed. The findings are
has responsibility for determining the nature and recorded in a Risk Register along with their potential
extent of the risks it is willing to take in achieving its impact, the mitigations and controls currently in place,
strategic objectives and for oversight of the risk and recommendations, where possible, for risk reduction.
management process. Flybe has used the experience
gained over many years to develop structures and The Audit Committee and the Board review the Risk
processes to identify, evaluate, manage and report on Register annually and will do so more frequently if
the significant risks faced by the Group. These necessary.
structures and processes, which are embedded within
Flybes operations, have been in place throughout the Risks identified
year and up to the date of approval of this Annual The Committee assesses whether suitable accounting
Report. The Board is satisfied that these structures and policies have been adopted and whether management
processes ensure that risks are adequately and have made appropriate estimates and judgements. The
appropriately addressed and corrective actions taken. Committee reviews accounting papers prepared by
management which provide details on the main
Mitigating controls for the key risks in the Group are nancial reporting judgements at both the half and full
regularly reviewed and monitored for accuracy and years. The Committee also reviews reports by the
completeness. These monitoring controls are reported external auditors on the half year and full year results
to the Operating Board monthly outlining events and which highlight any issues that have arisen as a result
mitigating actions taken. of their work.
In addition to the work of this Committee, the Safety The signicant issues considered in the year are
and Security Committee (which also reports to the detailed below, while the wider set of risks that impact
Board), chaired by an independent Non-Executive on the business are shown on pages 28 to 31:
Director, meets quarterly, or more regularly where >>The Committee reviewed the adequacy of provisions
events require, to review the Groups safety
against revenue that had been recognised and in
performance.
particular whether the transition to new revenue
accounting systems meant that previously
The Internal Audit team facilitated risk review
established provisions were no longer required. The
workshops to identify risks, their mitigations and
key judgement was around the level of likely refunds
impact:
of tickets that may be required in relation to those
that have been issued.
>>The defined benefit pension scheme inherited with
the acquisition of BA Connect in March 2007 is
Group relatively sensitive to small movements in the
Board 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.
Bottom up Audit Committee Top down >>A review on Information Security was undertaken
assessement feedback and and a cross-departmental Committee has been set-
review up to monitor and control the risks around personal
and corporate data. The Information Security
Committee will review policies and procedures as
Executive Management well as ensuring that these are incorporated and
adhered to across the business. The Head of Internal
Audit and Risk has also been given the title of
Information Security Officer with the responsibility of
Assessments of: ensuring compliance with the relevant regulations on
the control of data and personal information.
Strategic risk Project risk
>>Review of critical accounting judgements including:
Functional risk Supplier risk
EU261 passenger delay compensation, all fleet
transactions, sale of Finland joint venture, deferred
tax assets, revenue recognition, maintenance
provisions, and the audit report.

External audit process the external auditor over the financial period. A
During the year, the Committee reviewed the breakdown of the fees paid to the Groups external
effectiveness of the overall audit process including auditor during the year is set out in note 6 to the
review of: Consolidated Financial Statements and further
Governance
>>The
detail is highlighted below.
Annual Report and Financial Statements
ensuring that they are fair, balanced and (C) The Audit Committee receives each year a report
understandable from the external auditor as to any matters that the
>>Papers
external auditor considers have, or may have,
on critical judgements, internal control and
bearing on its independence and which need to be
fraud prepared by management
disclosed to the Audit Committee. The Audit
>>External auditor papers detailing their audit plans as Committee is satisfied that, notwithstanding non-
well as on the results of their full year audit and half- audit work, Deloitte LLP have retained objectivity
year review and independence during the year. The Audit
Committee will continue to monitor its policy in this
>>The independence and effectiveness of the external
regard and accepts that non-audit work should be
audit itself
controlled to ensure that it does not compromise
the independence of the external auditor.
It is standard practice for the external auditors to meet
privately with the Audit Committee without any
The Company is considering its policy in the light of
member of management or the Executive Directors
new EU legislation on audit independence and will
being present at least once each year.
revise its policy further once the detailed requirements
that will apply in the UK are known.
The Audit Committees policy on the engagement of
the external auditor to supply non-audit services is set
No contractual obligations that the Group has in place
out on the Company website at www.flybe.com/en/
limit the Audit Committee in its choice of auditors.
corporate/pdf/Audit-Committee-Terms-of-
Reference-31-1-14.pdf.
Auditor rotation
Group policy is that the external audit should be put
As a result of its reviews, the Audit Committee was
out to tender at least once in every ten years and the
able to recommend the re-appointment of Deloitte LLP
audit firm shall be changed after no more than 20
to the Board.
years service. Deloitte LLP replaced another firm as
auditor for the March 2007 audit and the audit partner
Auditor independence
rotated during 2012/13.
The Audit Committee is responsible for ensuring that
an appropriate relationship is maintained between the
Audit fees non-audit services
Group and the external auditor. The external auditor
The level of fees paid to the auditors is as follows:
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 2012/13 2013/14 2014/15 Average
000 000 000 000
to ensure that auditor objectivity and independence
are safeguarded the following controls have been Audit fees (A) 201 225 249 225
implemented: Services provided to
satisfy legislative or
(A) A formal policy on the use of the external auditor regulatory requirements 290 97
for non-audit work has been agreed by the Audit Other non-audit services
Committee and is available on the Companys (B) 123 276 83 161
website at www.flybe.com/en/corporate/ Percentage (B/A) 61.2% 122.7% 33.3% 71.4%
governance. In summary, this ensures that, usually,
such work is only awarded when, by virtue of the
Other non-audit services relate to all other services
auditors knowledge, skills or experience, the
provided by the auditors including tax advisory
external auditor is clearly to be preferred over
services of 19k and tax compliance services of 15k.
alternative suppliers. Any fees charged by the
After deducting work on all corporate transactions, the
Groups external auditor in respect of non-audit
percentage of non-audit services to audit services over
services over a set cumulative value of, currently,
a three year average was 71.4%.
more than 50,000 requires the prior approval of
the Audit Committee. Under the policy, the external
auditor is specifically excluded from providing any
Charlie Scott
work that may impair their independence and from
Chairman, Audit Committee
providing internal audit services to Flybe.
9 June 2015
(B) The Audit Committee receives and reviews each
year an analysis of all non-audit work awarded to

Directors report
The Directors present their Annual Report on the Restrictions on share transfers
affairs of the Group, together with the Financial There are no restrictions on transfers of shares other
Statements and Auditors Report for the year ended than:
31 March 2015. The Corporate Governance statement >>where the Company has a lien on a partly-paid share
on page 41 forms part of this report. An indication of
unless to do so would prevent dealings in partly-paid
likely future developments of the business is included
shares from taking place on an open and proper
in the Strategic Report.
basis
Content included in the Strategic Report >>where the transfer is in favour of more than four joint
The Companies Act 2006 (as amended) requires transferees
certain information to be included in either the
>>where a transfer request is not accompanied by the
Directors Report, or where it is not, for that
relevant share certificate(s) and such other evidence
information to be included in the Strategic Report and
as the Directors may reasonably require to show the
cross-referenced. The items included in the Strategic
right of the transferor to make the transfer
Report are:
>>certain restrictions which may from time to time be
Item Page number
imposed by laws or regulations such as those relating
to insider dealing
Greenhouse gas emissions 38
Employee involvement 34 >>pursuant to the Companys code for securities
Employment of disabled people 36 transactions whereby the Directors and designated
Diversity policy and reporting 36 employees require approval to deal in the Companys
shares
Directors and Company Secretary >>incertain circumstances where the shareholder in
The Directors and Company Secretaries who served question has been issued with a notice under s793 of
during the year are shown on pages 42 and 45. the Companies Act 2006
>>where a proposed transferee of the Companys
Dividends
No dividends are declared or proposed for either this shares has failed to furnish the Directors with a
year or the prior one. declaration of nationality (together with such
evidence as the Directors may require) as required by
Share capital the Companys Articles of Association
Details of the movement in authorised and issued >>the powers given to the Directors by the Companys
share capital during the year are provided in note 28 Articles of Association to limit the ownership of the
to the Consolidated Financial Statements. 1,185 Companys shares by non-UK nationals or non-EEA
ordinary shares of 1 pence each were issued on nationals and powers to enforce this limitation
1 September 2014 and 790 ordinary shares of 1 pence including the right to force the sale of any affected
each were issued on 16 September 2014 to employees shares
of Flybe Limited pursuant to the terms of the Flybe
SAYE Scheme 2011. As at 31 March 2015, the As at 6 June 2015, the Company is not aware of any
Companys share capital comprised a single class of arrangements between shareholders that may result in
ordinary share of 1 pence each. The issued share capital restrictions on the transfer of securities or voting
of the Company was 2.1m comprising 216,656,776 rights.
ordinary shares of 1 pence each.
Shares with special rights
The rights and obligations attaching to the Companys There are no shares in the Company with special rights
ordinary shares are set out in the Companys Articles of with regard to control of the Company.
Association.

Restrictions on Voting Rights Political donations
The Notice of AGM specifies deadlines for exercising Flybe did not make any political donations during the
voting rights and appointing a proxy or proxies to vote year (2013/14: nil).
in relation to resolutions to be passed at the AGM. All
Governance
proxy votes are counted and the numbers for, against Substantial interests
or withheld in relation to each resolution are On 4 June 2015, the Company had been notified, in
announced at the AGM and published on the accordance with chapter 5 of the Disclosure and
Companys website after the meeting. Transparency Rules, of the following voting rights as a
shareholder of the Company:
Annual General Meeting
The Annual General Meeting (the AGM) provides the Percentage of Number
Board with an opportunity to communicate with, and voting rights of
answer questions from, private and institutional Name of holder
and issued
share capital
ordinary Nature of
shares holding
shareholders and the majority of the Board will be
Aberforth Partners LLP Beneficial
available at the meeting to answer shareholders
questions. The Chairmen of each of the Board SFM UK Management LLP /
Committees will be available at the Annual General Quantum Partners LP Beneficial
Meeting to answer questions. At the AGM the Chairman Artemis Investment

reports, after each show of hands, details of all proxy Management LLP Beneficial
votes lodged for and against each resolution and the Standard Life Investment Ltd Beneficial
number of abstentions. Subsequently, the results are Pelham Long/Short Master

published on the Groups website at www.flybe.com/ Fund Limited Beneficial
en/corporate/investors. The Wellcome Trust Limited Beneficial
T. Rowe Price Associates, Inc. Beneficial
The Companys standard procedure is to ensure that Ameriprise Financial, Inc. Beneficial
the Notice of AGM and related papers are sent to
shareholders at least 20 working days before the Financial calendar
meeting.
Employee share scheme Item Date
The Trustee of the Flybe Share Incentive Plan (the Annual General Meeting 22 July 2015
Plan) will, on receipt of any offer, compromise Half-year results 2015/16 November 2015
arrangement or scheme which affects ordinary shares Full year results 2015/16 June 2016
held in the Plan, invite participants to direct the Trustee
on the exercise of any voting rights attaching to the The dates above are indicative and confirmation will be
ordinary shares held by the Trustee on their behalf listed on our website at www.flybe.com and through
and/or direct how the Trustee shall act in relation to RNS announcements.
those ordinary shares. The Trustee shall take no action
in respect of those ordinary shares for which it has The Directors consideration of the Groups use of
received no directions or ordinary shares which are financial instruments is set out within the Strategic
unallocated. Generally, on a poll, the Trustee shall vote Report.
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.

Directors report
continued
Registered office In the case of each of the persons who are Directors of
New Walker Hangar the Company at the date when this report is approved:
Exeter International Airport
(A) so far as each of the Directors is aware, there is no
Clyst Honiton
relevant audit information of which the Companys
Exeter EX5 2BA
auditor is unaware
United Kingdom
(B) each of the Directors has taken all the steps that
The Company is domiciled in the United Kingdom. they ought to have taken as a Director to make
themselves aware of any relevant audit information
Company registrar and to establish that the Companys auditor is
Capita Registrars Limited aware of that information
The Registry
34 Beckenham Road This confirmation is given and should be interpreted in
Beckenham accordance with the provisions of s418 of the
Kent BR3 4TU Companies Act 2006.
Telephone: 0871 664 0300 Deloitte LLP have expressed their willingness to
(Calls cost 10 pence per minute plus network extras) continue in office as the Companys auditor and a
resolution to reappoint them will be proposed at the
Outside of the UK: +44 20 8639 3399 forthcoming Annual General Meeting.
Company number By order of the Board

1373432
Auditor Philip de Klerk

Deloitte LLP Chief Financial Officer
Abbots House 9 June 2015
Abbey Street
Reading RG1 3BD

Directors remuneration
Whilst we have not recommended any fundamental

changes to the arrangements, we have made some
amendments both to reflect good practice and the
Regulations. Accordingly we are providing
Governance
shareholders with the opportunity to approve the
policy. We have also consulted our major shareholders,
in line with the commitment made in last years Report.
Flybe continues to deal positively and robustly with the

challenges it faces as a business. Management has now
dealt with most of the legacy issues it inherited. This
includes the loss-making Flybe Finland, the large
forward order of unwanted E175 jets, the excess cost
base, the heritage unprofitable routes, the low aircraft
and crew utilisation and the depleted balance sheet.
Our UK business continues to perform well, in a

difficult environment. There remain a number of issues
Elizabeth McMeikan still to be addressed fully. The last significant legacy
Chairman Remuneration Committee issue is the surplus E195 jets. This is a high priority, but
this has proved problematic as there is little outside
demand for this type of aircraft. The Flybe team needs
further strengthening in quality and depth. The new
Annual Statement routes introduced require maturity and fine-tuning.
Additional new routes are being identified. Further cost
Dear Shareholder needs to be taken out of the business. The opportunity
raised by the successful contract to maintain A400Ms
I am pleased to introduce this years Remuneration needs to be developed.
Report, the first I have prepared in my capacity as the
new Chair of the Remuneration Committee. As The turnaround of Flybe will continue for a few years. It
required by the relevant Regulations, this Report is split is vital that the business attracts, retains and motivates
into three sections: a high quality management team to maintain the
momentum so far created to finish the turnaround and
(A) this Annual Statement deliver long-term value growth.
(B) the Directors Remuneration Policy Report, and
As you will be aware, our existing remuneration policy
(C) the Annual Report on Remuneration. for the two Executive Directors is as follows:
As explained below, we are proposing certain changes Base Salary
to the policy that was approved by shareholders at last CEO 425,000
years AGM. Therefore, in line with the Regulations, a CFO 285,000
revised Directors Remuneration Policy Report will be
submitted for another binding shareholder vote at the Benefits
2015 AGM and, if approved, will be effective from that Standard benefits (e.g. private health care, life
date for up to three years. The Annual Report on assurance, car/chauffeur allowances, etc).
Remuneration will be submitted to a separate advisory
vote. Pension
15% defined contribution/slightly lower salary
Policy review supplement.
During the year we reviewed the remuneration
arrangements of our CEO (Saad Hammad) and CFO Annual Bonus
(Philip de Klerk) to ensure that the Companys CEO 150% salary max
executive remuneration policy is aligned to, and CFO 100% salary max
supportive of, Flybes primary aim of generating Targets are a blend of financial (e.g. PBT) and strategic
sustainable value for our investors. The policy also objectives.
needs to take account of the Companys current
circumstances and challenges and emerging best
practice.

continued
Long-term incentives The primary focus of our review was on long-term

Before the recruitment of the CEO and CFO, Flybe incentive provision. The cash-based one-off awards
operated a Performance Share Plan, of fairly standard granted to the CEO and CFO on their recruitment,
design and under which awards worth up to 150% of linked to share price/market cap targets, were
salary could be granted each year in normal designed to attract high quality executives at the early
circumstances and which would vest three years later stage of a challenging turnaround. From now on, long-
based on performance against pre-set targets (a blend term incentive provision at Flybe will more closely
of EPS and TSR was used in the past). However, neither reflect market/best practice, while taking full account
the current CEO nor CFO has received awards under of the fact that we are still only one year into the
the PSP. Instead, as reported previously, they received turnaround, and that it has some way still to run. We
one off cash-based recruitment awards. have also tried to keep the incentive plan as simple as
possible to operate and communicate.
An overriding objective of Flybes remuneration policy
is to ensure that our executive team are incentivised to Therefore, we recommend that awards should be:
generate sustainable long-term returns to our >>Share-based, rather than cash-based
investors, that they are fairly (but not excessively)
rewarded for doing so, and that they are not >>Granted via a regular annual award cycle
incentivised to take risks beyond those agreed by the
>>Subject to a mix of targets measured over a three
Board.
year period
>>Subject also to a holding period, so that all vested
shares are not received until five years following
grant
>>Accompanied by malus provisions
These requirements can all be satisfied under the existing Performance Share Plan (albeit modified to reflect the
new holding period and malus clause). The key features of the PSP from now on will therefore be:
Key feature of
PSP award Proposed approach and rationale
Grant timing The first award will be made immediately after the 2015 AGM. The performance period for this
award will end three years later, in Summer 2018, with shares not vesting in full due to the new
holding period (see below) until 2020. As the CEO and CFOs current recruitment awards will
expire at the end of their relevant performance periods (July 2016 and August 2017 respectively),
a new long-term incentive grant policy needs to commence in 2015 to ensure their continued
incentivisation and retention.
Award level Annual awards over shares worth between 100% and 150% of salary will be made to the CEO
and CFO, with the actual levels determined each year having regard to the circumstances and
challenges prevailing at the time. For 2015 the award level will be 150% of salary.
Performance As per the existing plan rules, awards will vest subject to performance conditions measured over
conditions the three years from grant. For the awards made in 2015, a blend of EPS and relative TSR targets
will be employed as the primary measures, thereby encouraging both the delivery of strong
underlying financial performance and the generation of above market returns to our
shareholders. In addition, the performance conditions include an underpin that enables the
Remuneration Committee to scale back vesting (to zero if considered appropriate) in the event
that there has been a safety event that it considers warrants the use of such discretion. Further,
awards will only vest to the extent that the Committee is satisfied that the Company has made
satisfactory progress in resolving the outstanding legacy issue relating to the E195s in an
appropriate manner.
Holding period To reflect emerging best practice, a post vesting holding period (during which shares are
available for malus but are not otherwise forfeitable other than on a dismissal for cause) will be
introduced under which only 50% of the vested shares will be receivable at the end of the three
year performance period, with the remaining 50% receivable in two equal tranches on the fourth
and fifth anniversaries of grant.
Malus To further reflect emerging best practice, PSP awards will be subject to a new malus provision.

Apart from the introduction of the new holding period Other key Committee activities during the year
and malus clause, all other features of the existing PSP During the year, the Committee also dealt with the
will remain unchanged save that, to reflect best practice, following issues:
we are introducing a cap of 250% of salary on the value
Governance
>>Agreeing the bonus outturn for 2013/14
of awards that can be made under the PSP in
>>Determining the Executive Directors base salary
exceptional circumstances (this facility being currently
uncapped). The Committee will not make any further levels for 2014/15, which were not changed
grants to Executive Directors under the cash-based >>Setting the Executive Directors bonus targets for
LTIP. 2014/15
>>Granting the CFOs recruitment-related award and
No material changes are proposed to the other elements overall package
of the Executive Directors remuneration package. In
addition, there will be no increase in the Executive >>Reviewing the Committees Terms of Reference, an
Directors base salaries for the forthcoming year. updated copy of which can be found on the
Companys website
The Executive Directors annual bonus opportunity will >>Selection of new independent advisers
continue to operate under the existing caps (150% of >>Agreeing long-term incentive awards to below Board
salary for the CEO, 100% for the CFO) and will pay out senior executives
based on performance against a blend of financial and
strategic targets. For 2015/16, this weighting will The Committee welcomes and carefully considers
continue to be 70:30, with PBT again being the feedback from shareholders. While all remuneration-
financial target used. However, as with the PSP, the related resolutions were passed with substantial
bonus includes an underpin that enables the majorities at the 2014 AGM, we took due account of the
Remuneration Committee to scale back bonuses (to number of votes against these resolutions. There were a
zero if considered appropriate) in the event that there number of factors that led some investors to vote against
has been a safety event that it considers warrants the the resolutions, some of which were more one-off in
use of such discretion and/or in the absence of nature (e.g. the termination arrangements of a former
satisfactory progress in resolving the E195 legacy issue. Director, the CFOs recruitment award) and others which
were more forward-looking (e.g. the extent of bonus
During the course of its review, the Committee did target disclosure, our approach to share ownership
consider whether a share deferral feature should be guidelines, the lack of clawback/malus provisions). We
introduced into the bonus. However, the Committee have attempted to address all those concerns in this
believes that the use of the share-based PSP (rather recommendation. As a result, the Committee hopes that
than additional cash-based awards) as the primary we can count on your support at the AGM.
long-term incentive vehicle going forward which now
has a five year holding period will provide significant Annual bonus in respect of 2014/15 performance
alignment with shareholders. In addition, to add further For the year ended 31 March 2015 the annual bonus
alignment, not only will we extend the share ownership was dependent on a mixture of financial targets based
guidelines to the Executive Directors (thus far they on PBT performance (70% of opportunity) and
have not been bound by these guidelines), but we will personalised objectives (30%) based on the strategic
also increase the guideline holding from the current priorities. The profit objective required an underlying
100% of salary to 150%. Finally, to reflect best practice, PBT (excluding currency translation, management
we will be introducing a clawback provision in the bonus and any major one-off items) of at least 5m.
annual bonus plan. This was not achieved, and so no payout is to be made.
The Remuneration Committee believes that this Philip de Klerks recruitment award
As described in last years Report, Philip de Klerk was
approach is fair and provides appropriate reward if
granted a phantom option under the cash-based LTIP
performance is delivered. In particular, we believe that
on 22 August 2014 over 705,096 notional shares.
the long-term incentive proposals strike a good
balance between bringing this important element of
Recruitment remuneration policy
remuneration more into line with market/best practice, The Companys recruitment remuneration policy, has
while also reflecting key Flybe-specific objectives of been redrafted in order to give the Committee
delivering the balance of the turnaround and sufficient flexibility to secure the appointment and
sustainable value growth. promotion of high-calibre executives to strengthen the
management team and secure the skill sets to deliver
We also hope that the many best practice compliant our strategic aims.
features we have introduced (e.g. bonus clawback, a
holding period and malus in the PSP, enhanced share In any event, should you wish to contact me with
ownership guidelines etc.) are well received. any comments on our approach to executive
remuneration, please feel free to email me at
Liz.mcmeikan@flybe.com.

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 75), scheme interests awarded during the financial year (pages 75 to 76), payments to past Directors
(page 75), payments for loss of office (page 76) and the statement of Directors shareholdings and share interests
(pages 78 to 79). The remaining sections of the report are not subject to audit.
This section of the report sets out a revised policy for Executive Directors which shareholders are asked to
approve at the 2015 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 22 July 2015, 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. The policy takes due account of the new Corporate Governance Code and is felt to be appropriate to
support the long-term success of the Company while ensuring that it does not promote inappropriate risk-taking.
Policy table
The following table summarises the Groups policies in respect of key elements of Executive Director
remuneration which will, if approved, take effect from the date of the AGM:
Function Operation Opportunity Performance metrics
Basic salary Basic salaries are payable monthly Salaries in respect of the None.
in cash and are reviewed annually, year under review (and for
This is the taking into account the size and the following year) are
core element nature of the role, individual skills, disclosed in the Annual
of pay and experience and performance, with Report on Remuneration.
reflects the reference to pay and conditions
individuals elsewhere in the Group, and It is anticipated that salary
role and external market data for increases will generally be
position comparable positions at companies in line with those awarded
within the of similar sector and size to Flybe. to salaried employees as a
Group with whole. In certain
some Any increase in basic salary is circumstances (including,
adjustment normally effective 1 April. but not limited to,
to reflect increases for other
their employees, changes in
capability role and responsibilities,
and market levels, and
contribution. 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.

Policy Table continued
Governance
Pension Executive Directors are eligible to Executive Directors None.
participate in a contributory scheme receive a contribution,
To provide and may elect on a cost-neutral or equivalent cash
competitive basis for the Group to receive a supplement in lieu thereof,
retirement monthly non-bonusable cash of up to 15% of salary.
benefits. supplement in lieu of pension above
the Pensions Annual and Lifetime
allowances.
Salary is the only element of

remuneration that is pensionable.
Benefits Executive Directors receive benefits Benefits vary by role and None.
which consist primarily of car/ individual circumstances;
To provide chauffeur allowances (including tax eligibility and the items
competitive on such benefit), fuel card, private offered and their cost is
benefits. medical insurance and life reviewed periodically.
assurance and, for the CEO only,
membership of a London club Benefits in respect of the
(which operates as a base for work year under review are
undertaken while in London disclosed in the Annual
together with tax on such Report on Remuneration.
subscriptions), although can include
any such benefits that the It is not anticipated that
Committee deems appropriate to the cost of benefits
ensure the benefits package is will vary significantly
appropriately competitive and year-on-year, although
reflects the circumstances of the the Committee retains the
individual Director including, but discretion to approve a
not limited to, accommodation/ higher cost in exceptional
relocation allowances. circumstances (e.g.
relocation) or in
circumstances where
factors outside the
Companys control have
changed materially (e.g.
increases in insurance
premiums).
SIP, SAYE SAYE All-employee scheme under Savings, contributions and None (reflecting HMRC
which all UK employees (including free shares are capped at rules).
To align the Executive Directors) may save up the prevailing legislative
interests of to the maximum monthly savings limit or other such lower
employees limit (as determined by legislation) limit as the Committee
and over a period of three or five years. may determine at the time
shareholders Options under the SAYE scheme are UK employees are invited
by granted at a discount of up to 20% to participate.
encouraging to the market value of shares at the
all employees date of grant.
to own Flybe
shares. 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).

continued
Annual The annual bonus is a discretionary Maximum annual bonus Performance is assessed on
bonus scheme, under which performance opportunity: an annual basis, based on
targets are agreed by the the achievement of
Incentivise Committee at the start of each CEO: objectives relating to the
and reward financial year. Payments (made financial performance,
>>150% of base salary
Executive following the end of each progress of strategic
Directors for performance year) are based on the priorities and/or personal
the delivery Committees assessment of the Other Executive Directors: targets. The specific
of business performance against these targets. >>100% of salary measures used in the bonus
strategy. and their weighting may
Once set, performance targets will vary each year depending
generally remain unchanged for the on business context and
year, except to reflect events such strategy.
as corporate acquisitions or other
major transactions where the Attaining the threshold level
Committee considers it to be of performance for any
necessary in its opinion to make measure will not produce a
appropriate adjustments. pay-out of more than 20%
of the maximum portion of
Annual bonus outcomes are paid in overall annual bonus
cash. The Committee will keep attributable to that measure,
under review whether it is with a sliding scale to full
appropriate for bonuses to be partly pay-out for maximum
deferred into shares. Where such performance.
arrangements are operated, a
payment equivalent to the Further details on the bonus
dividends that would have accrued for the year under review
on the number of shares that vest are provided in the Annual
may be made to participants on Report on Remuneration.
vesting, as cash or shares.
Clawback provisions apply to future

annual bonuses as described more
fully at note 4.

Governance
Long-term The primary ongoing long-term Awards of shares worth The Committee may set
incentives incentive plan is the Performance up to 150% of salary can such performance
Share Plan. Awards can be granted be granted each year (or conditions on PSP awards
Incentivise as conditional shares or a nil/ such higher number as the as it considers appropriate
creation of nominal cost option vesting subject Committee considers (whether financial or non-
long-term to the achievement of three-year appropriate in exceptional financial and whether
shareholder performance conditions. A post circumstances, up to a corporate, divisional or
value, and vesting holding period also applies, maximum of 250%). individual).
support such that vested shares are not Details of any awards
alignment receivable in full until the fifth granted in a year will be Once set, performance
with anniversary of grant. disclosed in the relevant measures and targets will
shareholders Annual Report on generally remain unaltered
interests. A payment equivalent to the Remuneration. unless events occur which,
dividends that would have accrued in the Committees opinion,
on the number of shares that vest make it appropriate to
may be made to participants on substitute, vary or waive the
vesting (including any holding performance conditions in
period), as cash or shares. such manner as the
Committee thinks fit.
PSP awards are subject to malus
provisions described more fully at Performance periods may
note 4. be over such periods as the
Committee selects at grant,
which will not be less than
(but may be longer than)
three years.
No more than 20% of

awards vest for attaining the
threshold level of
performance for each
condition. Further details of
measures, their weighting
and targets will be disclosed
in the relevant Annual
Report on Remuneration.
Notes to the policy table

1. Stating maximum amounts for the 3. Past obligations
remuneration policy In addition to the above elements of remuneration, any
The DRR regulations and related investor guidance commitment made prior to, but due to be fulfilled after,
encourages companies to disclose a cap within which the approval and implementation of this remuneration
each element of the Directors Remuneration Policy will policy will be honoured.
operate. Where maximum amounts for elements of
remuneration have been set within the Directors 4. Malus/clawback
Remuneration Policy, these will operate simply as caps To reflect emerging best practice, the Committee has
and are not indicative of any aspiration. decided to introduce a malus provision into the PSP,
under which the Committee may lapse part/all of any
2. Travel and hospitality unvested PSP award and/or any shares that are the
While the Committee does not consider these to form subject of a post vesting holding period in certain
part of benefits in the normal usage of that term, we circumstances (e.g. if information used to determine
have been advised that corporate hospitality (whether vesting was materially inaccurate and resulted in an
paid for by the Company or another) and product overpayment, gross misconduct, material reputational
familiarisation through staff/business travel for Directors damage caused by mis-management etc). There will be
(and exceptionally their families) may technically come a three year time bar on this malus provision i.e. no
within the applicable rules and so the Committee award can be lapsed if the trigger event comes to light
expressly reserves the right for the Committee to more than three years after its occurrence.
authorise such activities within its agreed policies.

continued
Similarly, a clawback provision will apply to the annual of such discretion and/or to limit the out-turn to the
bonus under which any future net bonus paid can be extent that it is satisfied that the Company has made
reclaimed in broadly the same circumstances as apply satisfactory progress in resolving the outstanding
to the malus provision in the PSP (with a similar three legacy issue relating to the E195s in an appropriate
year time limit). manner.
5. Discretions Given the competitive nature of the Companys sector,

The Committee may exercise discretion in two broad the specific performance targets are considered to be
areas for each element of remuneration: commercially sensitive and accordingly are not
>>To
disclosed. Following the conclusion of the current
ensure fairness and align Executive Director
financial year, the Committee will consider whether it is
remuneration with underlying individual and
feasible to disclose the performance targets for the
company performance, the Committee may adjust
current financial year on a retrospective basis.
upwards or downwards the outcome of any short- or
long-term incentive plan payment within the limits of
8. Performance conditions for PSP awards in 2015
the relevant plan. Any adjustments in light of
and proposed quantum of initial awards (for
corporate events will be made on a neutral basis, i.e.
information only and not part of the Directors
the intention of any adjustment will be that the event
Remuneration Policy)
is not to the benefit or detriment of participants.
The performance measures and targets for the PSP
Adjustments to underlying performance may be
awards to be made in 2015 will be based on adjusted
made in exceptional circumstances to ensure
EPS and TSR growth, summarised as follows:
outcomes are fair both to shareholders and
participants.
% of that part of the Award
>>In the case of a non-regular event occurring, the Adjusted EPS (50% weighting) that Vests
Committee may apply its discretion to ensure 22.2 pence (for 2017/18) or more 100%
fairness and seek alignment with business objectives. Between 22.2 pence and 18.5 Pro-rata on
Non-regular events in this context include, but are pence straight-line basis
not limited to: corporate transactions, changes in the between 100% and
Companys accounting policies, minor or 20%
administrative matters, internal promotions, external 18.5 pence 20%
recruitment and terminations. Less than 18.5 pence 0%
Any use of discretion by the Committee during the TSR (50% weighting) relative to the constituents, as
financial year will be detailed in the relevant Annual at the 1 April prior to grant, of the FTSE SmallCap % of that part of the Award
excluding investment trusts that Vests
Report on Remuneration.
Upper quartile or more 100%
6. Shareholding guidelines Between upper quartile and Pro-rata on
Executive Directors are required to retain 50% of any median straight-line basis
net vested shares received under any share plan until between 100% and
they hold shares worth 150% of base salary. Shares 20%
subject only to a holding period will, consistent with Median 20%
institutional shareholder guidelines, count towards the Below median 0%
guidelines.
Performance conditions will be measured over three
7. Annual Bonus Plan performance measures to apply financial years to 31 March 2018. The EPS condition
in the 2015/16 Financial year (for information only looks at the EPS achieved in the final year only based
and not part of the Directors Remuneration Policy) on the reported adjusted EPS (subject to such
The proposed performance measures and targets for adjustments as the Committee considers appropriate)
the financial year to 31 March 2016 will be based on a and TSR compares the TSR over the three months prior
mix of Group PBT targets (70% weighting), as well as to the start of the financial year in which the grant is
the achievement of personal/strategic objectives (30% made with the three months prior to the end of the
weighting) relating to a number of performance financial year ending three years later. To the extent
indicators (including safety and other strategic that awards vest a holding period applies such that
objectives). The Committee selected these 50% of the shares are receivable immediately, with the
performance measures as they represent a balanced balance receivable in two equal tranches on the fourth
approach to recognising success against defined and fifth anniversaries of grant.
objectives. The bonus also includes underpins that
enable the Committee to scale back bonuses (to zero if
considered appropriate) in the event that there has
been a safety event that it considers warrants the use

The Committee selected these performance conditions Remuneration policy for other employees
as they provide a suitable balance between absolute The remuneration policy for other employees is based
growth (through EPS) and relative out-performance on broadly consistent principles as described above.
(through TSR) which are key measures of success for Annual salary reviews across the Group take into
Governance
the Company. In addition, the performance condition account company performance, local pay and market
includes an underpin that enables the Committee to conditions and salary levels for similar roles in
scale back vesting (to zero if considered appropriate) comparable companies.
in the event that there has been a safety event that it
considers warrants the use of such discretion. Further, Other members of the Groups Operating Board and
it includes an additional underpin that awards will only certain key management participate in similar annual
vest to the extent that it is satisfied that the Company bonus arrangements to the Executive Directors,
has made satisfactory progress in resolving the although award sizes vary by organisational level. PSP
outstanding legacy issue relating to the E195s in an awards are also granted to a broader population than
appropriate manner. the Executive Directors. All other employees may be
eligible to participate from time to time in an employee
The CEO and CFO will receive awards in 2015 of shares bonus scheme, under which a bonus is payable subject
worth 150% of salary. to the achievement of Group profit targets. All eligible
employees may 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. The charts below aim to
show this:
Pay for performance scenarios
2.0m
1.8m
35.5%
1.6m
1.4m
1.2m
35.5%
1.0m
41.3%
13.2%
0.8m
33.0%
0.6m
15.5% 27.5%
100% 53.8% 29.0%
0.4m 25.8%
100% 58.6% 31.2%
0.2m
0
Minimum Target Maximum Minimum Target Maximum
CEO CFO
Total fixed remuneration Annual bonus LTIP

continued
Minimum >>Consists of base salary, benefits and pension.

>>Base salary is the salary to be paid in 2015/16.
>>Benefits measured as benefits paid in the year ending 31 March 2015 as set out in the
single figure table (even though this was only for a part year for the CFO) and the
annualised cost of car allowances may be higher in the forthcoming year.
>>Pension measured as the defined contribution of 11% for CFO or cash allowance in lieu of
Company contributions of 15% of salary for CEO
Base salary Benefits Pension Total fixed
Saad Hammad 425,000 39,612 56,019 520,631

Philip de Klerk 285,000 6,911 31,350 323,261
Target Based on what the Director would receive if performance was on-target (excl. share price
appreciation and dividends):
>>Annual bonus: consists of the on-target bonus of 50% of maximum opportunity.
>>LTI: consists of the threshold level of vesting (20% vesting).
Maximum Based on the maximum remuneration receivable (excl. share price appreciation and dividends):
>>Annual bonus: consists of maximum bonus of 150% of base salary for the CEO and 100% for
the CFO.
>>LTI: consists of the face value of PSP awards (150% of salary for the CEO and CFO reflecting
the 2015 awards future awards may not be made at this level)
Approach to recruitment remuneration

The Companys recruitment remuneration policy, which is set out below, aims to give the Committee sufficient
flexibility to secure the appointment and promotion of high-calibre executives to strengthen the management
team and secure the skill sets to deliver our strategic aims.
In terms of the principles for setting a package for a For external candidates, it may be necessary to make
new Executive Director, the starting point for the additional awards in connection with the recruitment to
Committee will be to apply the general policy for buy-out awards forfeited by the individual on leaving a
Executive Directors as set out above and structure a previous employer. For the avoidance of doubt, buy-out
package in accordance with that policy. Consistent awards are not subject to a formal cap.
with the Regulations, any caps contained within the
policy for fixed pay do not apply to new recruits, For any buy-outs the Company will not pay more than is,
although the Committee would not envisage in the view of the Committee, necessary and will in all
exceeding these caps in practice. Where a new cases seek, in the first instance, to deliver any such
appointees salary is initially set below market, the awards under the terms of the Companys existing
Committee may manage salary progression in a incentive arrangements. It may, however, be necessary
phased manner over a number of years, subject to the in some cases to make buy-out awards on terms that are
individuals development in the role. more bespoke than the existing arrangements.
The Annual Bonus Plan and PSP will operate (including All buy-outs, whether under the Companys existing
the maximum award levels) as detailed in the general incentive arrangements or otherwise, will take account
policy in relation to any newly appointed Executive of the service obligations and performance
Director. Any recruitment-related PSP awards which requirements for any remuneration relinquished by the
are not buy-outs will be subject to the relevant plan individual when leaving a previous employer. The
terms, including performance conditions) and limits as Committee will seek to make buy-outs subject to what
stated in the general policy. Details of any recruitment- are, in its opinion, comparable requirements in respect
related awards will be appropriately disclosed. of service and performance. However, the Committee
may choose to relax this requirement in certain cases
For an internal appointment, any variable pay element (such as where the service and/or performance
awarded in respect of the prior role may either requirements are materially completed, or where such
continue on its original terms or be adjusted to reflect factors are, in the view of the Committee, reflected in
the new appointment as appropriate. some other way, such as a significant discount to the
face value of the awards forfeited) and where the
For external and internal appointments, the Committee Committee considers it to be in the interests of
may agree that the Company will meet certain shareholders.
relocation expenses as it considers appropriate.

Service contracts and treatment for leavers and these circumstances, awards will normally be pro-
change of control rated for time and vest at the normal time, subject to
The Committees policy is to provide service contracts the achievement of the performance condition over
for Executive Directors with notice periods of 12 the complete performance period. In the event of a
Governance
months or less. The Committee reserves flexibility to change of control, the award will normally be pro-
alter these principles if necessary to secure the rated for time and vest based on performance over
recruitment of an appropriate candidate and if the period to the change of control. At its discretion,
appropriate introduce a longer initial notice period (of the Committee may vary these default treatments.
up to two years) reducing over time. >>Under the rules for the PSP, awards lapse on
cessation of employment other than in certain
Saad Hammad entered into a service agreement dated
prescribed good leaver circumstances (e.g. death,
8 July 2013 and Philip de Klerk into a service
ill-health, redundancy, retirement) in which case
agreement dated 21 April 2014. Both service
awards vest either on cessation or on the normal
agreements are subject to 12 months notice by either
vesting date, typically subject to the performance
party.
conditions and prorating (unless the Committee
determines otherwise). In the event of a change in
Upon termination, Executive Directors are entitled to
control, awards will normally be time pro-rated and
salary and benefits (inclusive of pension/pension
vest subject to the performance conditions. Awards
allowances) for the duration of their notice period. It is
are not forfeitable during any subsequent holding
the Committees policy to seek to mitigate the need for
period (but may be available for the application of
such payments. Each Executive Director has post-
malus).
termination provisions which (among others) restrict
the Executive Director from competing with Flybe for >>The Company has the power to enter into settlement
the duration of their notice period. agreements with Directors and to pay compensation
to settle potential legal claims. In addition, and
Executive Director service contracts are available to consistent with market practice, in the event of the
view at the Companys registered office. termination of an Executive Director, the Company
may make a contribution towards that individuals
In the event that a participant ceases to be an legal fees and fees for outplacement services as part
employee of Flybe, treatment of outstanding awards of a negotiated settlement. Any such fees will be
under the Groups long-term incentive plans will be disclosed as part of the detail of termination
determined based on the relevant plan rules. When arrangements. For the avoidance of doubt, the policy
considering any such payments, the Committee does not include an explicit cap on the cost of
reviews all potential incentive outcomes to ensure they termination payments.
are fair to both shareholders and participants.
>>Executive
Non-Executive Director remuneration
Directors will normally not be entitled to
any bonus payment on termination of employment
(or if notice of termination has been given) unless, for Date of Expiry of
Non-Executive Director appointment current term
any period actually worked, the Committee considers
it appropriate in its discretion. In certain good leaver Charlie Scott 1 April 2006 23 July 2015
circumstances, however, Mr Hammad will be eligible David Kappler 3 March 2015 2018
to receive an annual bonus, pro-rated for the portion Simon Laffin 4 November 2013 2016
of the financial year worked. Liz McMeikan 1 August 2014 2018
>>Under the one-off recruitment long-term incentive Timo Anderson 1 May 2014 2017
for Saad Hammad, the award will normally lapse if
Mr Hammad leaves Flybe before the end of the Non-Executive Directors (NEDs) do not have service
performance period. At its discretion, the Committee contracts. Instead, their services are provided for under
may vary this treatment in certain leaver the terms of a letter of appointment with the Group
circumstances, i.e. where Mr Hammad is a good and are subject to six months notice by either party.
leaver. In the event of a change of control, Details of the terms of appointment of the current
performance will be tested over a curtailed period NEDs are provided above.
based on the Companys market capitalisation on the
date of change of control. The NEDs are not eligible for bonuses or participation
in share schemes and no pension contributions are
>>Under the rules for the LTIP (under which Philip de made on their behalf.
Klerk received an award on joining Flybe), awards
lapse in the event a participant leaves Flybe, unless
for reasons including, but not limited to, death, ill-
health, permanent disability and redundancy. In

continued
Details of the policy on fees paid to our NEDs are set out in the table below:
Fees Fee levels are reviewed annually, Non-Executive Director None.

with any adjustments normally (and the Chairmans) fee
To attract effective 1 April in the year increases are applied in
and retain following review. line with the outcome of
Non- the annual fee review.
Executive The fees paid to the Chairman are Fees for the year under
Directors determined by the Committee, review (and the coming
with broad while the fees of the Non-Executive year) are set out in the
commercial Directors are determined by the Annual Report on
and other Executive Directors. Remuneration.
experience
relevant to Additional fees are payable for It is expected that any
the acting as Senior Independent increases to NED fee
Company. Director and as Chairman of any of levels will be in line with
the Boards Committees (Audit, salaried employees over
Remuneration, Safety & Security). the life of the policy.
However, in the event that
Fee levels reflect the skills and there is a material
experience of the NEDs, the market misalignment with the
practice adopted in similar sized market or a change in the
organisations and anticipated time complexity, responsibility
commitments. or time commitment
required to fulfil the NED
NEDs may also receive certain role, the Board has
benefits from time to time. discretion to make an
appropriate adjustment
to the fee level.
Aggregate fees (plus the
value of any benefits) will
not exceed the cap in the
Companys Articles of
Association (currently
500,000).
To assist with product familiarisation, all Group Board Directors are entitled to four complementary pairs of return
plane tickets per annum, with the individual Director paying any associated tax liability that arises. No other
benefits are envisaged for the Non-Executive Directors (including the Chairman) but the Company reserves the
right to provide benefits (including travel and office support) within the overall limits on fees set out in the
Companys Articles of Association. Currently, no such tax liabilities arise.
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. A base
fee in line with the prevailing market rates 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 UK Corporate Governance Code.
Whether the Executive Director retains any associated fees, or whether they are remitted to the Company, will be
considered on a case-by-case basis.

Consideration of conditions elsewhere in the Annual report on remuneration
Company
The following section provides details of how Flybes
The Company seeks to promote and maintain good
remuneration policy was implemented during the
relationships with employee representative bodies
Governance
financial year ended 31 March 2015.
including trade unions and employee representatives
as part of its employee engagement strategy and
Remuneration Committee membership in the year
consults on matters affecting employees and business
ended 31 March 2015
performance as required in each case by law and
The Committees purpose is to advise the Board and
regulation in the jurisdictions in which the Company
make recommendations to it about all elements of the
operates. The Committee is also mindful of the salary
remuneration packages of the Executive Directors and
increases applying across the Group when considering
other members of senior management as it is
salary increases for the Executive Directors. The
designated to consider, including any major changes in
Committee does not, however, consult with employees
employee benefit structures throughout the Group.
specifically on the effectiveness and appropriateness
The Committee has agreed new Terms of Reference
of the executive remuneration policy and framework.
which are available on the Flybe website. The Group
complied with the provisions of the Code relating to
Consideration of shareholder views
Directors remuneration throughout the financial year.
The Committee considers shareholder views received
during the year and at each Annual General Meeting, as
The current members of the Committee are:
well as guidance from shareholder representative
bodies more broadly, in shaping the remuneration >>Liz McMeikan (Committee Chairman)
policy. The Committee continues to keep its (from 1 August 2014)
remuneration arrangements under regular review, to
>>Timo Anderson (from 1 May 2014)
ensure the remuneration policy continues to reinforce
the Companys long-term strategy and aligns closely >>Simon Laffin (from 4 November 2013)
with shareholders interests. We will consult, and seek
>>Charlie Scott (retires 23 July 2015)
approval from, shareholders before making any
significant changes to our remuneration policy. >>David Kappler (from 3 March 2015)
As stated in the Committee Chairs introductory letter, David Longbottom and Alan Smith stood down from
while all remuneration-related resolutions were passed the Committee during the year.
with substantial majorities at the 2014 AGM, the
Committee has taken account of the number of votes The Committee meets at least twice each year and may
against these resolutions, and attempted to address all request relevant Executive Directors and senior
of them in these recommendations. 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

two occasions to consider, and agree, amongst other
matters the items set out in the Annual Statement on
page 61.

continued
Advisers
At the start of the year, the Committee and the Group During the year, Olswang LLP provided advice on legal
was receiving remuneration advice from Kepler issues related to share scheme matters, as well as on
Associates (Kepler), a firm of independent other matters not relating to remuneration in its
remuneration consultants. Kepler is a founding capacity as the Groups legal advisor.
member of and signatory to the Code of Conduct for
Remuneration Consultants, details of which can be Summary of shareholder voting at the 2014 AGM
found at www.remunerationconsultantsgroup.com. In The following table shows the results of the advisory
2014/15 Kepler provided independent advice and data vote on the 2013/14 Remuneration Report at the 2014
in respect of the remuneration of the Executive Annual General Meeting:
Directors and other senior executives, and short- and
long-term incentive design. Kepler did not advise the Total number % of votes
Company on any other issues other than remuneration of votes cast
and was considered independent by the Committee. For (including discretionary) 148,044,263 86.79%
Their total fees (including expenses, but excluding Against 22,533,863 13.21%
VAT) for the provision of remuneration services to the
Total votes cast (excluding
Committee in 2014/15 were 22,086.25 on the basis of withheld votes) 170,578,126 100.00%
time and materials.
Votes withheld 8,213,090
On the 8 December 2014, following a competitive Total votes cast (including
tender process FIT Remuneration Consultants were withheld votes) 178,791,216
appointed as the Committees new independent
advisers. FIT are also members of and signatories The following table shows the results of the binding
to the Code of Conduct for Remuneration vote on the Remuneration Policy at the 2014 Annual
Consultants, details of which can be found at General Meeting:
www.remunerationconsultantsgroup.com. In
2014/15 FIT provided independent advice and data in Total number % of votes
connection with the review of the remuneration of the of votes cast
Executive Directors and the drafting of this Directors For (including discretionary) 130,301,221 74.87%
Remuneration Report. FIT do not advise the Company Against 43,738,314 25.13%
on any other issues other than remuneration and are Total votes cast (excluding
considered independent by the Committee. Their total withheld votes) 174,039,535 100.00%
fees (including expenses, but excluding VAT) for the Votes withheld 4,751,681
provision of remuneration services to the Committee in Total votes cast (including
2014/15 were 35,421.14 on the basis of time and withheld votes) 178,791,216
materials.

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 2015 and the prior year:
Governance
Base salary/ Annual
Year fees2 Benefits3 bonus4 PSP Pension Total
Executive Directors
Saad Hammad 2014/15 425,000 39,612 56,0196 520,631
Saad Hammad 2013/14 284,030 45,525 127,5005 42,500 499,555
Philip de Klerk1 2014/15 176,115 6,911 21,900 204,926
Non-Executive Directors
Simon Laffin 2014/15 150,000 150,000
Simon Laffin7 2013/14 62,924 62,924
Charlie Scott 2014/15 63,000 63,000
Charlie Scott 2013/14 63,000 63,000
Timo Anderson1 2014/15 44,000 44,000
Liz McMeikan1 2014/15 32,000 32,000
David Kappler1 2014/15 4,666 4,666
Former Directors
David Longbottom 2014/15 20,000 20,000
David Longbottom 2013/14 48,000 48,000
Andrew Knuckey 2014/15 103,013 3,792 13,3896 120,194
Andrew Knuckey 2013/14 283,048 8,518 45,713 337,279
Alan Smith 2014/15 20,000 20,000
Alan Smith 2013/14 48,000 48,000
1 During the year, Messrs Anderson, de Klerk and Kappler and Ms McMeikan joined the Board on 1 May 2014, 19 August 2014, 3 March 2015 and 1
August 2014 respectively.
2 Base salary includes a length of service increment of 350 for Mr Knuckey and 50 for Mr Hammad. This approach is consistent with that of
other employees.
3 Taxable benefits comprise private health care, car allowance, chauffeur (in 2014/15 15,000 for Mr Hammad; 2,535.24 for Mr Knuckey;
4,325.66 for Mr de Klerk).
4 Payment for performance during the 2013/14 year previously declared in 2013/14. Details can be found on page 76.
5 Mr Hammad donated his bonus of 127,500 for the year ended 31 March 2014 to charity (net of tax).
6 During 2014/15, Mr Hammad and Mr Knuckey received cash sums paid in lieu of pension contributions.
7 Fees in respect of Mr Laffin were paid to Simon Laffin Business Services Limited for the period November 2013 to March 2014.
The aggregate emoluments (being salaries/fees, benefits, cash allowances in lieu of pension contributions and
annual bonuses) of all Directors for the 2014/15 year was 1,179,417.
Incentive outcomes for the year ended 31 March 2015

Annual bonus in respect of 2014/15 performance
For the year ended 31 March 2015 the annual bonus was dependent on a mixture of financial targets based on
PBT performance (70% of opportunity) and personalised objectives (30%) based on the strategic priorities.
The minimum threshold PBT was 5m with a maximum bonus payable for a PBT of 10.8m (calculated on a
pre-E195 cost basis).
The profit objective required an underlying PBT (excluding currency translation, management bonus and any
major one-off items) of at least 5m. The PBT achieved equivalent was 0.6m, and so no payout is to be made.
The CEO had five principal personal objectives; identifying and establishing new routes and bases, improving
performance in Flybe Finland or exiting the business, enhancing the quality and performance of senior
management, determining the future of our MRO operation, and signing up at least one new White Label
customer. The Committee concluded that the CEO had made good progress on these objectives. However, as the
minimum level of profit required before any payout under the profit before tax element was not met, the
Committee concluded that no part of the bonus should be payable.
The CFOs profit objectives were the same as the CEOs and so were also not achieved. He had five principal
personal objectives when he joined halfway through the year; dealing with the legacy issues of grounded aircraft
and Flybe Finland, enhancing investor relations, cash management, systems implementation and completing his
induction as a Board member. Again, the Committee concluded that he had made a good start on these in the
seven months since his appointment but that, as the financial element had not been met, no part of the bonus
should be payable.

continued
Exit payments made in the year Relative importance of spend on pay

Andrew Knuckey ceased to be a Director on The table below shows shareholder distributions (i.e.
2 August 2014. Andrew Knuckey resigned on dividends and share buybacks) and total employee pay
3 August 2013 and worked a full years notice and was expenditure for the financial years ended 31 March 2014
paid his normal salary and benefits (as disclosed in the and 31 March 2015, along with the percentage change
single figure table on page 75). He did not receive any in both.
termination payments or annual bonus and all
outstanding PSP awards lapsed on his departure. RAK % change
2014/15 2013/14 2014-2015
Business Services Limited (owned by Andrew Knuckey)
signed a consultancy agreement with the Company on Shareholder
12 January 2015 to provide consultancy services to the distributions nil nil
Company on the Annual Report. RAK Business Total employee
Services was paid 20,500 under the consultancy expenditure 89.1m 98.0m (9.1)%
agreement.
Review of past performance
Payments to past Directors In line with the requirements of the Regulations, the
No payments to past Directors were made during the chart below shows the value of a hypothetical 100
year. However, following the year-end in settlement of a holding from the date Flybes shares were priced
claim by Mr Strong, based on legal advice, the immediately prior to IPO (being 10 December 2010) to
Company agreed to pay 76,574 in settlement. The 31 March 2015. The chart illustrates the TSR
actual sum inclusive of costs will be reported next year. performance of the Group against the FTSE SmallCap
Index (excluding investment trusts). The FTSE
Percentage change in Chief Executive Officer SmallCap Index (excluding investment trusts) was
remuneration chosen as it is a recognised broad equity market index
The table below shows the percentage change in the of which the Group has been a member since
Chief Executive Officer remuneration from the prior Admission in December 2010 and is the comparator
year compared to the average percentage change in group used for assessing TSR under the PSP.
remuneration for all employees.
Total Shareholder Return Index
The Chief Executive Officers remuneration includes (9th December 2010 = 100)
base salary, taxable benefit and annual bonus and for
2013/14 includes the sum of payments made to Saad 200 00% 00%
Hammad. No employees have received pay rises (other
than through promotion or change in role) in 2014/15.
150
All
CEO employees 100
2014/15 2013/14 % change % change
2014-2015 2014-2015
00%
Base 50
salary 425,000 448,916 1
(5.3%)
Taxable
0
benefits 39,612 49,013 (19.2%) 9 Dec 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar
Annual 2010 2011 2012 2013 2014 2015
bonus 127,5002 (100%) Flybe FTSE SmallCap Index ex Invt Trust
1 Includes the relocation allowance in connection to Mr Hammads Source: Thomson Reuters
appointment as Chief Executive Officer during the year.
2 Mr Hammad elected to donate his net annual bonus amount in full
to charity.

Historical TSR performance
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.
Governance
Saad Hammad 2010/11 2011/12 2012/13 2013/14 2014/15
Single figure of remuneration 499,555 520,631

Annual bonus outcome1 (% of max.) 30% 0%
PSP vesting outcome (% of max.) n/a n/a
1 Mr Hammad elected to donate his 2013/14 net annual bonus amount in full to charity.
Jim French 2010/11 2011/12 2012/13 2013/14 2014/15
Single figure of remuneration 589,689 606,785 600,401 212,395 nil

Annual bonus outcome (% of max.) 0% 0% 0% 0% 0%
PSP vesting outcome (% of max.) n/a n/a 0% 0% 0%
Implementation of policy for the year commencing 1 April 2015

Base salary
For the coming year, Executive Directors salaries will be frozen at their 2014/15 levels, as follows:
Saad Hammad 425,000

Philip de Klerk 285,000
Pension
Executive Directors are eligible to receive a company pension contribution of up to 15% of basic salary and are
also eligible to elect to join the main GPPP defined contribution scheme open to all UK employees. 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 has elected to receive his pension contributions as a non-bonusable cash supplement.
Philip de Klerk is participating in the Groups approved pension salary sacrifice scheme.
Annual bonus
The annual bonus for the 2015/16 financial year will be structured on a similar basis to that for the 2014/15
financial year with a 70:30 mix of PBT and personal objectives. However, the PBT target will be measured on a
consistent basis with our revised accounting policies and will, therefore, be measured on a post-grounded aircraft
costs but pre-any one off costs of exiting the E195s and pre-revaluation of gains/(losses) on USD aircraft loans
but including other exchange rate movements basis. Further, awards will only vest to the extent that the
Committee is satisfied that the Company has made satisfactory progress in resolving the outstanding legacy
issue relating to the E195s in an appropriate manner and also subject to a safety underpin.
The targets for the new financial year are commercially sensitive and, therefore, not disclosed although a similar
level of retrospective target disclosure as is contained in this report is envisaged next year.
Long-term incentive awards

Details of the PSP awards that it is intended be made in 2015 can be found on page 68.
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 from that for the year to
31 March 2015. NED fees in the forthcoming year will be frozen at their 2014/15 levels.

continued
Committee Senior
chairmanship Independent
Basic fee fee Director fee Total
Simon Laffin 150,000 150,000

Charlie Scott1 40,000 8,000 15,000 63,000
Liz McMeikan 40,000 8,000 48,000
David Kappler 40,000 8,000 8,000 56,000
Timo Anderson 40,000 8,000 48,000
1 Senior Independent Director fee includes Deputy Chairman fee.
Directors interests
A table setting out the beneficial interests of the Directors and their families in the share capital in the year under
review can be found below:
Holding at Holding at
Director 31 March 2015 1 April 2014
Saad Hammad 287,472 227,272

David Longbottom 100,000
Simon Laffin 280,000
Sir Timo Anderson 8,000
Charlie Scott 20,833
Liz McMeikan 10,000
This excludes any shares held via share plans as disclosed below.
Directors shareholding status

The table below shows the shareholding of each Director as at 31 March 2015:
Shares held Options held

Unvested and
Owned Vested but Unvested and Vested subject to
outright or subject to subject to perf. but not continued
vested holding period conditions exercised employment
Saad Hammad 287,472
Simon Laffin 280,000
Timo Anderson 8,000
Liz McMeikan 10,000
Charlie Scott 20,833
David Kappler 100,000
There have been no changes in the interests of any of the Directors between 1 April 2015 and 9 June 2015.
Directors interests in shares and share options

PSP and SIP
Interests Interests
awarded vested Interests Interests
Interests held during the during the lapsed during held at
Executive Scheme Date of grant at 1 April 2014 year year the year 31 March 2015
Andrew Knuckey PSP 21 January 2011 84,745 84,745
Andrew Knuckey PSP1 5 August 2011 173,410 173,410
Andrew Knuckey SIP2 21 January 2011 100 100 100
1 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.
2 Awards made under the SIP are subject to no further performance or service conditions, but are subject to a three-year holding period.
3 All interests lapsed on his date of leaving.

SAYE options
Interests Date from
Governance
Interests held held at which
Executive at 1 April 2013 Granted Exercised Lapsed 31 March 2015 Exercise price exercisable Expiry date
Andrew Knuckey 790 790 0
All SAYE options lapsed on his date of leaving.
Saad Hammads recruitment award

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 20th 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 CEO 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).
Philip de Klerks recruitment award

As described in last years Report, Philip de Klerk was granted a phantom option under the cash-based LTIP on
22 August 2014 over 705,096 notional shares with an opening price of 1.2126. This award vests on the third
anniversary of grant provided that the closing price (i.e. the average share price over three months prior to the
third anniversary of grant) is at least 1.6126. To the extent that this performance condition is met, an amount
equal to the embedded gain (i.e. the difference between the opening price and the closing price) at the end of
the three-year performance period (capped at 400% of the opening price) will vest on a phased basis between
three and four years from grant (i.e. 50% on the third anniversary of grant, 25% six months later and the final 25%
a further six months later).
On behalf of the Board
Elizabeth McMeikan
Chairman Remuneration Committee
9 June 2015

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;
>>presentinformation, 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
>>theStrategic 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 Philip de Klerk

Chief Executive Officer Chief Financial Officer
9 June 2015 9 June 2015

Independent Auditors Report 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 2015 and of the Groups loss for the year then ended;
>>theconsolidated 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
>>thefinancial 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 by
management in their calculation of the aircraft maintenance
Management continue to recognise provisions. This evaluation included:
provisions for maintenance obligations in
>>testingthe integrity and arithmetical accuracy of the provision
relation to leased aircraft. Their approach to
recognising the provision of 69.4m is set model through recalculations; and
out in the critical accounting judgements in >>consideration and challenge of the consistency and
note 4 and further detail is provided in note reasonableness of the assumptions adopted, including review of
27.
lease terms and conditions, testing of source data for the model
to information from lessors, comparison of assumptions to
The quantification of maintenance
provisions requires complex judgements contract terms, recent interval and cost experience. We have
and estimates to be made including supplemented this work with corroborative inquiry of
considerations of aircraft utilisation, engineering management, in particular in relation to asset lives,
expected maintenance intervals and the utilisation pattern of the aircraft and the consistency of the
associated costs, and any changes in terms provisions with their assessment of aircraft condition.
with maintenance providers.

continued
Risk How the scope of our audit responded to the risk
Revenue recognition and provisioning We have evaluated the design and implementation of the key
controls over revenue recognition combined with appropriate
Group revenue includes 528.6m of substantive tests and analytical procedures of related revenue and
passenger revenue for the year ended revenue provisions. We have also challenged the judgements
31 March 2015. made in valuing the required revenue provisions and comparisons
of those judgments with historical experience. Specifically, we
Management have previously recorded have compared the provisions with post year-end actual data and
certain provisions against revenue where performed sensitivity analysis.
revenue data derived from the revenue
reporting systems, primarily arising from In addition, computer audit specialist members of the audit team
complex codeshare arrangements, needed have assisted with the audit of the automated controls for those
amendment to properly reflect revenue in systems controlled by the Group and the reconciliation of data in
accordance with the Groups revenue the revenue reporting systems to the general ledger.
recognition criteria (as set out in note 3 to
the financial statements). The Audit
Committees consideration of this area is
set out on page 56.
These provisions primarily arise from

activities such as inter-airline charge backs,
air passenger 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 We have evaluated managements process to prepare the
deferred tax calculation and evaluated the design and
A deferred tax asset of 8.8m is recognised implementation of the controls in this process.
at 31 March 2015. Further detail is provided
in note 26. We critically assessed the judgements over the level of forecast
taxable profits available to support the recoverability of the
Management judgement is required in deferred tax asset.
assessing the recoverability of the deferred
tax asset, based on the likelihood of We have involved tax specialists to assist with our assessment of
sufficient taxable profits arising in future the tax principles applied in the tax calculations, being the
periods and the likelihood that the tax treatment of long funding leases, disposal of shareholding in joint
assets will be utilised. Management ventures and treatment of financial instruments.
consider the inherent volatility within the
airline industry in making their judgement.
Passenger compensation claims We have obtained managements calculation model underpinning

the provision. We:
A provision of 6.7m has been recorded at
>>challenged the reasonableness of the key assumptions in the
31 March 2015 in respect of claims made
model including the history and level of passenger claims;
under passenger compensation rights
under EU regulation. Further detail is >>reconciled a sample of delayed flights to external Civil Aviation
provided in note 27. Authority (CAA) information to test the accuracy of data in the
model; and
During the year, the regulation has been
>>recalculated managements calculations.
clarified as to when compensation should
be paid following court rulings on cases
brought by certain other airlines in the UK. We performed sensitivity analysis around the key drivers of the
However, there is an inherent level of provision.
complexity in estimating such provisions
and management have made their best We have also considered the compliance approach with the
estimate based on the number of historical regulations.
delayed flights and claims received to date.

A further risk that was included in our audit opinion for the year ended 31 March 2014 was in relation to the
carrying value of the Groups interest in the Flybe Finland joint venture. This has been excluded from the risks for
the 2015 year end as the joint venture was sold in the year and consequently has no carrying value on the balance
sheet and Flybe has recorded a loss from discontinued operations, which includes an impairment of 10m.
The description of the risks above should be read in conjunction with the significant issues considered by the
Audit Committee and discussed on page 56.
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.
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.
In determining our planning materiality we considered a number of measures and derived a blended figure of
1.56m (2014: 1.7m) based on these benchmarks, which had regard to revenue and statutory loss.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of
31,000 (2014: 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 group-
wide 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 the two components in the UK, being Flybe UK
(passenger operations) and Flybe Aviation Services (maintenance, repair and overhaul operations).
Our audit work comprised a full scope audit on both UK components 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 in that
component.
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 from continuing operations.
At the parent entity and head office level we 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.
In respect of the discontinued operations, the Groups share of Flybe Finlands loss for the year, prior to disposal,
was subject to specified audit procedures by a component auditor. Our audit work in Finland was executed at a
component materiality of 0.8m. The Group audit team directed the planning and risk assessment of the Finnish
component auditor, and reviewed and challenged the component auditors work and findings.
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.

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 ten 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 1 (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 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.

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
9 June 2015

Consolidated income statement
Year ended 31 March 2015
2014 2014
Before Restructuring
2015 restructuring costs 2014
Total costs (note 7) Total
Note m m m m
Group revenue 6 574.1 620.5 620.5
Consisting of:
Passenger revenue 528.6 553.9 553.9
Contract flying revenue 11.6 16.2 16.2
Revenue from other activities 33.9 50.4 50.4
Group revenue 574.1 620.5 620.5
Staff costs 9 (89.1) (98.0) (9.6) (107.6)

Fuel (105.5) (120.0) (120.0)
Net airport and en route charges (108.7) (122.1) (122.1)
Ground operations (69.1) (73.7) (73.7)
Maintenance (37.2) (41.9) (41.9)
Depreciation and amortisation (13.8) (14.3) (14.3)
Aircraft rental charges (80.6) (83.6) (83.6)
Marketing and distribution costs (27.4) (23.3) (23.3)
Other operating gains/(losses) 0.8 0.9 10.5 11.4
Other operating expenses (56.2) (43.0) (1.1) (44.1)
Operating profit/(loss) (12.7) 1.5 (0.2) 1.3
Investment income 10 0.8 0.7 0.7

Finance costs 11 (1.5) (1.7) (1.7)
Other gains/(losses) 12 (10.2) 8.3 8.3
Profit/(loss) before tax (23.6) 8.8 (0.2) 8.6
Tax charge 13 (0.1) (0.1) (0.1)

Profit/(loss) after tax of continuing operations (23.7) 8.7 (0.2) 8.5
Loss on discontinued operations 5 (12.0) (0.5) (0.5)

Profit/(loss) (35.7) 8.2 (0.2) 8.0
Earnings/(loss) per share:

Basic and diluted 14 (16.5) 9.6

Consolidated statement of comprehensive income
2015 2014
m m
Loss/(profit) for the financial year (35.7) 8.0
Items that will not be reclassified to profit or loss:

Re-measurement of net defined benefit obligation (18.4) (2.2)
Deferred tax arising on net defined benefit obligation 4.1 0.5
(14.3) (1.7)
Items that may be reclassified subsequently to profit or loss:
Losses arising during the year on cash flow hedges (23.4) (15.7)
Reclassification of gains/(losses) on cash flow hedges included in the income statement 15.5 3.2
Deferred tax arising on cash flow hedges (0.2) 2.1
Foreign exchange translation differences 3.8 (0.6)
(4.3) (11.0)
Other comprehensive loss for the year (18.6) (12.7)
Total comprehensive loss for the year (54.3) (4.7)
Consolidated statement of changes in equity

Capital Retained
Share Share Hedging Other redemption earnings/ Total
capital premium reserve reserves reserve (deficit) equity
m m m m m m m
Balance at 1 April 2013 0.7 60.6 3.6 6.7 22.5 (46.0) 48.1
Loss for the year 8.0 8.0
Other comprehensive income for
the year (11.0) (1.7) (12.7)
Equity settled share based
payment transactions 0.6 0.6
Share capital issued 1.5 154.2 155.7
Share issue expenses (5.6) (5.6)
Balance at 31 March 2014 2.2 209.2 (7.4) 6.7 22.5 (39.1) 194.1
Loss for the year (35.7) (35.7)
Other comprehensive loss for
the year (4.3) (14.3) (18.6)
Equity settled share based
payment transactions 0.1 0.1
Share capital issued
Share issue expenses 0.1 0.1
Balance at 31 March 2015 2.2 209.3 (11.7) 6.7 22.5 (89.0) 140.0

Consolidated balance sheet
At 31 March 2015
2015 2014
Note m m
Non-current assets
Intangible assets 15 8.8 5.2
Property, plant and equipment 16 189.1 170.6
Interests in joint ventures 17 12.4
Other non-current assets 18 38.0 42.3
Restricted cash 21 7.1 6.6
Deferred tax asset 26 8.8 6.1
Derivative financial instruments 25 0.2
252.0 243.2
Current assets
Inventories 19 7.1 6.8
Trade and other receivables 20 98.3 85.8
Cash and cash equivalents 21 177.9 177.9
Restricted cash 21 10.9 33.9
Derivative financial instruments 25 14.1 0.4
Assets held for sale
308.3 304.8
Total assets 560.3 548.0
Current liabilities
Trade and other payables 22 (96.3) (82.0)
Deferred income 23 (77.1) (70.7)
Borrowings 24 (13.0) (10.4)
Provisions 27 (51.9) (45.3)
Derivative financial instruments 25 (18.9) (8.0)
(257.2) (216.4)
Non-current liabilities
Borrowings 24 (106.2) (91.1)
Deferred tax liabilities 26 (0.3) (1.6)
Provisions 27 (24.3) (31.9)
Deferred income 23 (8.3) (9.5)
Employee benefits 35 (21.0) (2.5)
Derivative financial instruments 25 (2.6)
Liability for share-based payments 34 (0.4) (0.9)
(163.1) (137.5)
Total liabilities (420.3) (353.9)
Net assets 140.0 194.1
Equity attributable to owners of the company

Share capital 28 2.2 2.2
Share premium account 29 209.3 209.2
Hedging reserve (11.7) (7.4)
Other reserves 6.7 6.7
Capital redemption reserve 22.5 22.5
Retained deficit 30 (89.0) (39.1)
Total equity 140.0 194.1
The financial statements of Flybe Group plc, registered number 1373432, were approved by the Board of Directors
and authorised for issue on 9 June 2015.
Saad Hammad Philip de Klerk

Chief Executive Officer Chief Financial Officer

Consolidated cash flow statement
2015 2014
m m
Cash flows from operating activities

(Loss)/profit for the year (35.7) 8.0
Loss from discontinued operations 2.2 0.5
Interest received on joint venture loan (0.2)
Impairment of joint venture 10.0
Loss from continued operations (23.7) 8.5
Adjustments for:
Restructuring costs 10.7
Unrealised (gains)/losses on derivative contracts (2.5) (1.3)
Depreciation, amortisation and impairment 14.6 14.3
Investment income (0.8) (0.7)
Finance costs 1.5 1.7
Other net (gains)/losses 10.2 (8.3)
(Profit)/loss on sale of property, plant and equipment (0.2)
Profit on sale of assets held for sale (0.4)
Profit on sale of intangible assets (10.5)
Share-based payment expenses (0.5) 1.5
Taxation 0.1 0.1
(1.1) 15.4
Cash paid in respect of restructuring costs (12.8)

Cash paid for defined benefit pension funding (0.5)
Decrease/(increase) in restricted cash 22.5 (9.1)
(Increase)/decrease in trade and other receivables (10.9) (8.2)
Increase in inventories (0.2)
(Decrease)/increase in trade and other payables 21.3 (9.8)
Increase in assets held for sale
Increase/(decrease) in provisions and employee benefits (1.0) 19.0
31.2 (20.9)
Tax paid
Net cash flows from operating activities 30.1 (5.5)
Cash flows from investing activities

Proceeds from sale of property, plant and equipment 1.3
Proceeds from sale of intangible assets 17.5
Proceed from sale of assets held for sale 12.3
Decrease/(increase) in pre-delivery deposits 11.8
Interest received 1.0 0.7
Acquisition of property, plant and equipment (32.3) (19.9)
Capitalised computer software expenditure (4.3) (1.3)
Net cash flows from investing activities (35.6) 22.4
Cash flows from financing activities

Proceeds from new loans 25.4 14.7
Net proceeds on issue of shares 150.1
Interest paid (1.5) (1.7)
Repayment of borrowings (18.4) (25.4)
Net cash flows from financing activities 5.5 137.7
Net increase/(decrease) in cash and cash equivalents 154.6
Cash and cash equivalents at beginning of year 177.9 23.3
Cash and cash equivalents at end of year 177.9 177.9

Notes to the consolidated financial statements
1. General information At the date of authorisation of these financial

Flybe Group plc is a company incorporated in the statements, the following new standards and
United Kingdom under the Companies Act 2006. The interpretations, which have not been applied in these
address of the registered office is given on page 71. financial statements, were in issue but not yet effective
The nature of the UK Groups operations and its (and in some cases had not yet been adopted by the
principal activities are set out in the Strategic Report EU):
on pages 02 to 40. >>IFRIC 21, Levies (effective for the Groups 2015/16
financial year);
These financial statements are presented in pounds
sterling because that is the currency of the primary >>IFRS 15, Revenue from contracts with customers
economic environment in which the Group operates. (effective for the Groups 2017/18 financial year);
>>IFRS9, Financial instruments (effective for the
2. Adoption of new and revised standards Groups 2018/19 financial year).
Amendments to IFRSs and the new Interpretation that
are mandatorily effective for the current year
IFRIC 21 Levies IFRIC 21 addresses the issue as to when
The following amendments to standards, which are
to recognise a liability to pay a levy imposed by a
mandatory for the first time for the financial year ended
government. The Interpretation defines a levy, and
31 March 2015, are relevant for the Group:
specifies that the obligating event that gives rise to the
>>IFRS 10, Consolidated financial statements, builds on liability is the activity that triggers the payment of the
existing principles by identifying the concept of levy, as identified by legislation. It will not have a
control as the determining factor in whether an entity material impact on the Groups results.
should be included within the consolidated financial
statements of the parent company. The standard The directors do not expect that the adoption of IFRS 15
provides additional guidance to assist in the and IFRS 9 will have a material impact on the financial
determination of control where this is difficult to statements of the Group in future periods, except that
assess. IFRS 9 will impact both the measurement and
disclosures of financial instruments. Beyond the
>>IFRS 11, Joint arrangements, focuses on the rights and information above, it is not practicable to provide a
obligations of the parties to the arrangement rather reasonable estimate of the effect of these standards
than its legal form. There are two types of joint until a detailed review has been completed.
arrangements: joint operations and joint ventures.
Joint operations arise where the investors have rights 3. Accounting policies
to the assets and obligations for the liabilities of an Basis of accounting
arrangement. A joint operator accounts for its share of The financial statements are prepared in accordance
the assets, liabilities, revenue and expenses. Joint with International Financial Reporting Standards
ventures arise where the investors have rights to the (IFRSs). The financial statements have also been
net assets of the arrangement and are accounted for prepared in accordance with IFRSs adopted by the
under the equity method. European Union and therefore the Group financial
>>IFRS 12, Disclosures of interests in other entities, statements comply with Article 4 of the EU IAS
includes the disclosure requirements for all forms of Regulation.
interests in other entities, including joint
arrangements, associates, structured entities and The financial statements have been prepared on the
other off balance sheet vehicles. historical cost basis, except for certain financial
instruments that are recorded at fair value. The principal
>>IAS 36 Recoverable Amount Disclosures for Non- accounting policies adopted, which have been applied
Financial Assets The amendments to IAS 36 remove consistently in the current and the prior financial year,
the requirement to disclose the recoverable amount of are outlined below.
a cash-generating unit (CGU) to which goodwill or
other intangible assets with indefinite useful lives had Basis of consolidation
been allocated when there has been no impairment or The consolidated financial statements incorporate the
reversal of impairment of the related CGU. financial statements of the Company and entities
Furthermore, the amendments introduce additional controlled by the Company (its subsidiaries) made up to
disclosure requirements applicable to when the 31 March each year. Control is achieved where the
recoverable amount of an asset or a CGU is measured Company has the power to govern the financial and
at fair value less costs of disposal. operating policies of an investee entity so as to obtain
benefits from its activities.
The adoption of the above new amendments to
standards has not had a material impact on the Group. The financial statements of subsidiaries are included in
Other standards, amendments and interpretations the consolidated financial statements from the date that
which are mandatory for the first time for the financial control commences until the date that control ceases.
year ended 31 March 2015 are either not currently
relevant or not material for the Group.

All intra-group transactions, balances, income and Ancillary revenue, comprising principally baggage
expenses are eliminated on consolidation. carriage, advanced seat assignment, commissions,
change fees and credit and debit card fees due to the
Going concern Group, are recognised as revenue on the date the right
The Directors have, at the time of approving the to receive consideration occurs. In respect of credit and
financial statements, a reasonable expectation that the debit card fees and hotel and insurance commission,
Company and the Group have adequate resources to this occurs when each flight is booked and paid for. For
continue in operational existence for the foreseeable the remaining ancillary revenue, this occurs on the date
future. Thus they continue to adopt the going concern of transportation, as this is when the service is generally
basis of accounting in preparing the financial provided.
statements. Further detail is contained in the Financial
Review on page 20. Commission received from the issue of Flybe branded
credit cards by a third party provider is deferred to the
Investments in joint ventures extent that it relates to free flights which the Group is
The results, assets and liabilities of joint ventures are required to offer as part of the transaction. Commission
incorporated in these financial statements using the received in excess of the sales value of free flights
equity method, to the point the investment is classified granted to card-holders is recognised immediately as
for sale, in which case it is accounted for in accordance revenue. Revenue associated with free flights is
with IFRS5 Non-current assets Held for Sale and recognised when the related flights are taken.
Discontinued Operations. On disposal, the excess or
shortfall of sale proceeds against the carrying value of Aircraft maintenance and other revenue
the investment is recorded as a profit or loss to the These represent the amounts derived from the provision
income statement. of goods and services to customers during the year,
including aircraft maintenance, overhauls and the
Revenue and revenue recognition associated rotable and consumable parts. The amount
Revenue is measured at the fair value of the of profit attributable to the stage of completion of an
consideration received or receivable and represents engine and maintenance overhaul contract is recognised
amounts receivable for goods and services provided in when the outcome of the contract can be foreseen with
the normal course of business, net of discounts, VAT and reasonable certainty. Revenue for such contracts is
other sales-related taxes and comprises: stated at the cost appropriate to the stage of
completion plus attributable profits, less amounts
Passenger revenue recognised in previous years. Provision is made for any
Scheduled and charter passenger ticket sales, net of losses as soon as they are foreseen.
passenger taxes and discounts, are recorded in a
forward sales account and are included in current Other revenues, such as for cargo and contract flying,
liabilities, within deferred income, until recognised as are recognised in the period when the services are
revenue when transportation occurs. This also includes provided.
revenue derived from flights operated by the Groups
codeshare partners. Frequent Flyer Programme
During the financial year, Flybe has moved to a new
For flights purchased by members of the Frequent Flyer point purchasing agreement with Avios, a subsidiary of
Programme Rewards for all, an element of revenue International Airlines Group. Flybe also allows customer
representing the sales value of flights which these to redeem their points on Flybe travel through the
customers may take in future at no cost is deferred and Avios.com website and BA Executive Club website.
recognised when the related free flights have been
taken. The amount of deferral is based on the fair value Avios and BA Executive Club members can earn points
of an equivalent flight. on using Flybes network offering, including partners.
The cost of the points are treated as a revenue reduction
Flybe have entered into an agreement with Avios to at the point of complete transportation provision in the
enable passengers to accrue Avios points when flying income statement and at the point of sale recorded as a
on Flybe tickets. Flybe simply purchases points from liability against deferred income.
Avios at a pre-agreed rate and the cost of purchasing
the points is charged against the passenger revenues at Avios purchase the flights from Flybe on behalf of their
the point that transportation occurs. In addition, Avios customers and these are included in the deferred
purchases passenger tickets from Flybe in order to income and once transportation has been provided, in
include Flybe in its redemption network. Revenues from the income statement revenues. Currently Flybe is
these tickets are accounted for as passenger revenues. drawing down on a 1.5m prepayment made by Avios at
the outset of the arrangement.
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.

continued
3. Accounting policies continued Subsequent costs, such as long-term scheduled

Revenue and revenue recognition continued maintenance and major overhaul of aircraft, are
Interest revenue capitalised and amortised over the length of period
Interest income is recognised when it is probable that benefiting from these costs. All other costs relating to
the economic benefits will flow to the Group and the maintenance are charged to the income statement as
amount of revenue can be measured reliably. Interest incurred.
income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate Interest costs incurred on borrowings that specifically
applicable, which is the rate that exactly discounts fund progress payments on assets under construction,
estimated future cash receipts through the expected principally aircraft, are capitalised up to the date of
life of the financial asset to that assets net carrying completion and included as part of the asset.
amount on initial recognition.
Advance payments and option payments made in
Operating profit/(loss) respect of aircraft purchase commitments and options
Operating profit/(loss) is stated as profit/(loss) after to acquire aircraft where the balance is expected to be
charging restructuring costs but before tax, investment funded by lease financing are recorded at cost in
income, finance costs and other gains and losses. current or non-current aircraft deposits. On acquisition
of the related aircraft, these payments are included as
Foreign currencies part of the cost of aircraft and are depreciated from
Transactions arising, other than in the functional that date.
currency, are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets Depreciation is provided by the Group to write off the
and liabilities denominated in foreign currencies are cost less the estimated residual value of tangible fixed
re-translated using the rate of exchange ruling at the assets by equal instalments over their estimated useful
balance sheet date. Non-monetary assets and liabilities economic lives as follows:
denominated in foreign currencies that are stated at
fair value are translated at foreign exchange rates Freehold land Nil
ruling at the dates the fair value was determined. Non- Freehold and short 2% to 10% per annum or
monetary items that are measured in terms of historical leasehold buildings lease term where shorter
cost in a foreign currency are not translated. Plant, equipment and
motor vehicles 10% to 50% per annum
For the purposes of presenting Consolidated Financial Aircraft 7% to 20% per annum
Statements, the assets and liabilities associated with Maintenance assets 25% to 50% per annum
the Groups foreign operations (i.e. investment in joint
ventures) are translated at exchange rates prevailing on Estimated residual values are reviewed annually at each
the balance sheet date. Income and expense items period end, with reference to current market
associated with the Groups foreign operations are conditions. Where estimated residual values are found
translated at the average exchange rate for the period. to have changed significantly, this is accounted for
Exchange differences arising, if any, are recognised in prospectively as a change in estimate and depreciation
other comprehensive income and accumulated in charges over the remaining useful life of the asset are
equity. On disposal of a foreign operation, all of the adjusted to take account of the revised estimate of
accumulated exchange differences in respect of that residual value.
operations attributable to the Group are reclassified to
profit or loss. Intangible assets
Computer software
Exchange differences are recognised in the income Expenditure on development activities is capitalised if
statement in the period in which they arise. the product or process is technically and commercially
feasible and the Group intends to, and has the technical
Property, plant and equipment ability and sufficient resources to, complete
Property, plant and equipment are stated at their cost, development and if the Group can measure reliably the
less accumulated depreciation and impairment losses. expenditure attributable to the intangible asset during
Aircraft and engines and other associated equipment its development. The expenditure capitalised includes
are classified as aircraft. All other equipment is the cost of materials, direct labour and an appropriate
classified as plant and equipment. proportion of overheads. Other development
expenditure is recognised in the income statement as
An element of the cost of a new aircraft is attributed on an expense as incurred.
acquisition to prepaid maintenance of its engines and
airframe and is amortised over a period from one to Computer software is carried at cost less accumulated
five years from the date of purchase to the date of the amortisation. It is amortised on a straight-line basis
next scheduled maintenance event for the component. over its useful economic life of five years.

Landing rights Inventories
Intangible assets acquired are recognised to the extent Inventories are stated at the lower of cost or net
it is probable that expected future benefits will flow to realisable value as follows:
the Group and the associated costs can be measured
reliably. Landing rights acquired either as part of a Aircraft consumables
business combination or separately are capitalised at These comprise aircraft parts which are non-repairable
fair value at that date and are not amortised where and non-renewable. These are valued at the lower of
those rights are considered to be indefinite. Landing cost or net realisable value.
rights are considered to have an indefinite life only
when they will remain available for use for the Aircraft deposits
foreseeable future provided minimum utilisation Aircraft deposits represent deposits made with aircraft
requirements are met. The carrying value of these manufacturers for future delivery of aircraft or deposits
rights is subject to impairment testing annually or when made with aircraft financiers or operating lessors to
events or changes in circumstances indicate that provide security for future maintenance work or lease
carrying values may not be recoverable. payments.
Disposals of property, plant, equipment and Financial instruments
intangible assets Financial assets and financial liabilities are recognised
The gain or loss on disposal of property, plant, when the Group becomes a party to the contractual
equipment and intangible assets after deducting any provisions of the relevant instrument.
costs associated with selling, disposing of or retiring
the relevant asset is recognised in the income Classification of financial instruments issued by the
statement and reported under other operating gains or Group
losses. Financial instruments issued by the Group are treated
as equity only to the extent that they meet the
Impairment of tangible and intangible assets following two conditions:
excluding goodwill >>they include no contractual obligations upon the
At each balance sheet date, the Group reviews the
Group to deliver cash or other financial assets or to
carrying amounts of its tangible and intangible assets
exchange financial assets or financial liabilities with
to determine whether there is any indication that those
another party under conditions that are potentially
assets have suffered an impairment loss. If any such
unfavourable to the Group; and
indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the >>where the instrument will or may be settled in the
impairment loss (if any). Companys own equity instruments, it is either a
non-derivative that includes no obligation to deliver a
Recoverable amount is the higher of fair value less variable number of the Companys own equity
costs to sell and value in use. In assessing value in use, instruments or is a derivative that will be settled by
the estimated future cash flows are discounted to their the Company exchanging a fixed amount of cash or
present value using a pre-tax discount rate that reflects other financial assets for a fixed number of its own
current market assessments of the time value of money equity instruments.
and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted. To the extent that this definition is not met, the
proceeds of issue are classified as a financial liability.
If the recoverable amount of an asset is estimated to Where the instrument so classified takes the legal form
be less than its carrying amount, the carrying amount of the Companys own shares, the amounts presented
of the asset is reduced to its recoverable amount. An in these financial statements for called up share capital
impairment loss is recognised as an expense and share premium account exclude amounts in
immediately. relation to those shares.
Government grants Finance payments associated with financial liabilities

Government grants are not recognised until there is are dealt with as part of finance expenses. Finance
reasonable assurance that the Group will comply with payments associated with financial instruments that
the conditions attaching to them and that the grants are classified in equity are treated as distributions and
will be received. Once such assurance exists, are recorded directly in equity.
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.

continued
3. Accounting policies continued Financial assets are classified into the following
Derivative financial instruments and hedging specified categories: financial assets at FVTPL,
The Groups activities expose it primarily to the financial assets that are designated and effective as
financial risks of changes in foreign currency exchange hedging instruments and loans and receivables. The
rates and commodity prices and uses forward foreign classification depends on the nature and purpose of
exchange contracts and commodity swaps to hedge the financial assets and is determined at the time of
these exposures. The Group does not use derivative initial recognition. The Group holds no available-for-
financial instruments for trading purposes. sale or held-to-maturity financial assets.
Derivative financial instruments are initially recognised Financial assets at FVTPL

and subsequently re-measured at fair value. Financial assets are classified as at FVTPL when the
financial asset is either held for trading or is designated
The Group designates hedges of foreign exchange and as at FVTPL. A fuel or foreign exchange hedging
commodity price risks on firm commitments as cash instrument is classified as held for trading if it is a
flow hedges. Hedge accounting is applied to these derivative that is not designated and effective as a
instruments. hedging instrument. A fuel or foreign exchange
hedging instrument may be designated as at FVTPL
Cash flow hedges upon initial recognition if the instrument forms part of
Changes in the fair value of derivative financial a group of financial assets or financial liabilities, or
instruments that are designated and are effective as both, which is managed and its performance is
hedges of future cash flows are recognised directly in evaluated on a fair value basis, in accordance with the
other comprehensive income and any ineffective Groups documented risk management strategy, and
portion is recognised immediately in the income information about the grouping is provided internally
statement in the other gains and losses line item. on that basis.
Amounts deferred in other comprehensive income are Financial assets at FVTPL are stated at fair value, with
recognised in the income statement in the same period any gains or losses arising on re-measurement
in which the hedged item affects net income or loss. recognised in the income statement. The net gain or
These amounts are recorded in the same line of the loss recognised in the income statement incorporates
income statement as the hedged item. However, when any dividend or interest earned on the financial asset
the forecast transaction that is hedged results in the and is included in the unrealised gains and losses on
recognition of a non-financial asset or a non-financial fuel and foreign exchange hedges line item or other
liability, the gains and losses previously accumulated in gains and losses line item in the income statement
equity are transferred from equity and included in the depending upon the nature of the instrument. Fair
initial measurement of the cost of the non-financial value is determined in the manner described in note 36.
asset or non-financial liability.
Loans and receivables
Hedge accounting is discontinued when the Group Trade receivables, loans and other receivables that
revokes the hedging relationship, the hedging have fixed or determinable payments that are not
instrument expires or is sold, terminated, or exercised, quoted in an active market are classified as loans and
or no longer qualifies for hedge accounting. Any gain receivables. Loans and receivables are measured at
or loss recognised in other comprehensive income at amortised cost using the effective interest method, less
that time is accumulated in equity and is recognised any impairment. Interest income is recognised by
when the forecast transaction is ultimately recognised applying the effective interest rate, except for short-
in the income statement. When a forecast transaction term receivables when the recognition of interest
is no longer expected to occur, the gain or loss would be immaterial.
accumulated in equity is recognised immediately in the
income statement. Impairment of financial assets
Financial assets, other than those at FVTPL, are
Financial assets assessed for indicators of impairment at each balance
All financial assets are recognised and derecognised on sheet date. Financial assets are impaired where there is
a trade date where the purchase or sale of a financial objective evidence that, as a result of one or more
asset is under a contract whose terms require delivery events that occurred after the initial recognition of the
of the investment within the timeframe established by financial asset, the estimated future cash flows of the
the market concerned. Initially they are measured at fair investment have been affected.
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.

Derecognition of financial assets evaluated on a fair value basis, in accordance with the
The Group derecognises a financial asset only when Groups documented risk management strategy, and
the contractual rights to the cash flows from the asset information about the grouping is provided internally
expire; or it transfers the financial asset and on that basis.
substantially all the risks and rewards of ownership of
the asset to another entity. If the Group neither Financial liabilities at FVTPL are stated at fair value,
transfers nor retains substantially all the risks and with any gains or losses arising on re-measurement
rewards of ownership and continues to control the recognised in profit or loss. The net gain or loss
transferred asset, the Group recognises its retained recognised in profit or loss incorporates any interest
interest in the asset and an associated liability for paid on the financial liability and is included in the
amounts it may have to pay. unrealised gains and losses on fuel hedges line item or
other gains and losses line item in the income
Cash and cash equivalents statement. Fair value is determined in the following
Cash, for the purposes of the cash flow statement, manner:
comprises cash in hand and deposits repayable on
demand, less overdrafts payable on demand. Other financial liabilities
Other financial liabilities, including borrowings, are
Cash equivalents are current asset investments which initially measured at fair value, net of transaction costs.
are readily convertible into known amounts of cash at, Other financial liabilities are subsequently measured at
or close to, their carrying values or traded in an active amortised cost using the effective interest method,
market, without curtailing or disrupting the business. with interest expense recognised on an effective yield
basis. The effective interest method is a method of
Restricted cash calculating the amortised cost of a financial liability
Restricted cash represents funds held by the Group in and of allocating interest expense over the relevant
bank accounts which cannot be withdrawn until certain period. The effective interest rate is the rate that
conditions have been fulfilled. The aggregate restricted exactly discounts estimated future cash payments
funds balance is disclosed by way of a note to these through the expected life of the financial liability, or,
financial statements and is classified as a current or where appropriate, a shorter period, to the net carrying
non-current asset based on the estimated remaining amount on initial recognition.
length of the restriction.
Derecognition of financial liabilities
Financial liabilities and equity The Group derecognises financial liabilities when, and
Debt and equity instruments are classified as either only when, the Groups obligations are discharged,
financial liabilities or equity instruments according to cancelled or they expire.
the substance of the contractual arrangements.
Provisions
Equity instruments Provisions are recognised when the Group has a
An equity instrument is any contract that evidences a present legal or constructive obligation as a result of a
residual interest in the assets of the Group after past event, it is probable that the Group will be
deducting all of its liabilities. Equity instruments issued required to settle that obligation and a reliable estimate
by the Group are recorded at the proceeds received, can be made of the amount of the obligation.
net of direct issue costs.
The amount recognised as a provision is the best
Financial liabilities estimate of the consideration required to settle the
Financial liabilities are recognised as either financial present obligation at the balance sheet date, taking
liabilities at FVTPL, financial liabilities that are into account the risks and uncertainties surrounding
designated and effective as hedging instruments, or the obligation. Where a provision is measured using the
other financial liabilities. cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash
Financial liabilities at FVTPL flows.
Financial liabilities are classified as at FVTPL when the
financial liability is either held for trading or it is When some or all of the economic benefits required to
designated as at FVTPL. A fuel or foreign exchange settle a provision are expected to be recovered from a
hedging instrument is classified as held for trading if it third party, a receivable is recognised as an asset if it is
is a derivative that is not designated and effective as a virtually certain that reimbursement will be received
hedging instrument. A fuel or foreign exchange and the amount of the receivable can be measured
hedging instrument may be designated as at FVTPL reliably.
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

continued
3. Accounting policies continued Restructuring provision

Provisions continued A restructuring provision is recognised when the Group
Leased aircraft maintenance provisions has developed a detailed formal plan for the
The Group incurs liabilities for maintenance costs in restructuring and has raised valid expectations in those
respect of aircraft leased under operating leases during affected that it will carry out the restructuring by
the term of the lease. These arise from the contractual starting to implement the plan or announcing its main
obligations relating to the condition of the aircraft when it features to those affected by it. The measurement of a
is returned to the lessor. To discharge these obligations, restructuring provision includes only the direct
the Group will either need to compensate the lessor for expenditures arising from the restructuring, which are
the element of the life of the component or maintenance those amounts that are both necessarily entailed by
interval used, or carry out the maintenance check before the restructuring and not associated with the ongoing
return of the aircraft to the lessor. activities of the entity.
The provisions recorded and charged to the income EU261 Passenger delay compensation
statement are dependent on the life of the component Provision is made for passenger compensation claims
or maintenance interval used and the individual terms when the group has an obligation to recompense
of the lease: customers under regulation EU261 where technical
issues have caused flights to be delayed. Provisions are
>>No charge is recorded during the initial period of measured based on known eligible flights delays and
lease agreements where no compensation or historic claim rates and are expected to unwind across
maintenance is required prior to hand-back. the claim window, which is 6 years.
>>After a component or maintenance interval passes its
half-life (or another measure depending on the Leases
individual lease) and compensation would be due to Operating leases
the lessor in accordance with the terms of the lease, Rental charges on operating leases are charged to the
a provision and matching income statement charge is income statement on a straight-line basis over the life
recorded equal to the amount of compensation that of the lease. In the event that lease incentives are
would be required based on the hours or cycles received to enter into operating leases, such incentives
flown at the balance sheet date. are recognised as a liability. The aggregate benefit of
incentives is recognised as a reduction of rental
>>After a component or maintenance interval has expense on a straight-line basis over the life of the
passed the trigger point such that the Group is respective asset.
contractually obliged to carry out the specified work,
a full provision for the cost of work is recorded. To the Sale and leaseback
extent that this provision represents an increase to the The Group enters into sale and leaseback transactions
half-life compensation provision already recorded a whereby it sells aircraft, or rights to acquire aircraft, to
maintenance asset is recorded within property, plant a third party. Flybe subsequently leases the aircraft
and equipment. The asset is depreciated over the back, by way of operating lease. Any profit or loss on
expected period to the next half-life compensation the disposal, where the price that the aircraft is sold for
point, or the end of the lease, whichever is sooner. is not considered to be fair value, is deferred and
amortised over the lease term of the asset.
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.

Finance leases Deferred tax
Where the Group enters into a lease which entails Deferred tax is the tax expected to be payable or
taking substantially all the risk and rewards of recoverable on differences between the carrying
ownership of an asset, the lease is treated as a finance amount of assets and liabilities in the financial
lease. The asset is recorded in the balance sheet as statements and the corresponding tax bases used in
property, plant and equipment, and is depreciated over the computation of taxable profit, and is accounted for
the estimated useful life to the Group. The asset is using the balance sheet liability method. Deferred tax
recorded at the lower of its fair value, less accumulated liabilities are generally recognised for all taxable
depreciation, and the present value of the minimum temporary differences and deferred tax assets are
lease payments at the inception of the finance lease. recognised to the extent that it is probable that future
Future instalments under such leases, net of finance taxable profits will be available against which
charges, are included as obligations under finance deductible temporary differences arise from the initial
leases. Rental payments are apportioned between the recognition of goodwill or from the initial recognition
finance element, which is charged to the income (other than in a business combination) of other assets
statement, and the capital element, which reduces the and liabilities in a transaction that affects neither the
outstanding obligation for future instalments. The taxable profit nor the accounting profit.
finance charge is allocated to each period during the
lease term so as to produce a constant periodic rate of Deferred tax liabilities are recognised for taxable
interest on the remaining balance of the liability. temporary differences arising on investments in
subsidiaries and associates, and interests in joint
Borrowing costs ventures, except where the Group is able to control the
Borrowing costs directly attributable to the acquisition, reversal of the temporary difference and it is probable
construction or production of qualifying assets, which that the temporary difference will not reverse in the
are assets that necessarily take a substantial period of foreseeable future.
time to get ready for their intended use or sale, are
added to the costs of those assets, until such time as The carrying amount of deferred tax assets is reviewed
the assets are substantially ready for their intended use at each balance sheet date and reduced to the extent
or sale. that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset
Investment income earned on the temporary to be recovered.
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the Deferred tax is calculated at the tax rates that are
borrowing costs eligible for capitalisation. expected to apply in the period when the liability is
settled or the asset is realised. Deferred tax is charged
All other borrowing costs are recognised in the income or credited in the income statement, except when it
statement in the period in which they are incurred. relates to items charged or credited directly to equity,
in which case the deferred tax is also dealt with in
Taxation equity.
Tax on the profit or loss for the year comprises current
and deferred tax. Tax is recognised in the income Deferred tax assets and liabilities are offset when there
statement, except to the extent that it relates to items is a legally enforceable right to set off current tax
recognised directly in equity, in which case it is assets against current tax liabilities and when they
recognised in equity. relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax
Current tax assets and liabilities on a net basis.
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.

continued
3. Accounting policies continued SAYE share options granted to employees are treated
Employee benefit costs as cancelled when employees cease to contribute to
The Group operates defined contribution and defined the scheme. This results in accelerated recognition of
benefit pension schemes. the expense that would have arisen over the remainder
of the original vesting period.
For the defined contribution schemes, the assets of the
schemes are held separately from those of the Group in For cash-settled share-based payments, a liability is
independently administered funds. The amount recognised for the good or services required,
charged to the income statement represents the measured initially at the fair value of the liability. At
contributions payable to the schemes in respect of the each balance sheet date until the liability is settled and
accounting period. at the date of settlement, the fair value of the liability is
remeasured, with any changes in fair value recognised
For defined benefit schemes, the cost of providing in profit or loss for the year.
benefits is determined using the Project Unit Credit
Method, with actuarial valuations being carried out at 4. Critical accounting judgements and key
the end of each reporting period. Re-measurement sources of estimation uncertainty
comprising actuarial gains and losses, the effect of the In the application of the Groups accounting policies,
asset ceiling and the return on scheme assets which are described in note 3, the Directors are
(excluding interest) are recognised immediately in the required to make judgements, estimates and
balance sheet with a charge to the statement of assumptions about the carrying amounts of assets and
comprehensive income in the period in which they liabilities that are not readily apparent from other
occur. Re-measurement recorded in the statement of sources. The estimates and associated assumptions are
comprehensive income is not recycled. Net-interest based on historical experience and other factors that
income (or expense) is recognised within finance costs are considered to be relevant. Actual results may differ
and is calculated by applying a discount rate to the net from these estimates.
defined benefit liability. The Group presents the
administration costs of the scheme in other operating The estimates and underlying assumptions are
costs in its consolidated income statement. reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
The retirement benefit obligation recognised in the estimate is revised if the revision affects only that
consolidated balance sheet represents the deficit in the period, or in the period of the revision and future
Groups defined benefit schemes. If a surplus resulted periods if the revision affects both current and future
from this calculation it would be limited to the present periods.
value of any economic benefit available in the form of
refund from the schemes or reduction in future Critical judgements in applying the Groups
contributions to the schemes. accounting policies
The following are the critical judgements, apart from
Share-based payments those involving estimations (which are dealt with
Equity-settled share-based payments to employees separately below), that the Directors have made in the
and others providing similar services are measured at process of applying the Groups accounting policies
the fair value of the equity instruments at the grant and that have the most significant effect on the
date. The fair value excludes the effect of non-market- amounts recognised in financial statements:
based vesting conditions. Details regarding the
determination of the fair value of equity-settled share- Aircraft maintenance
based transactions are set out in note 34. On acquisition of an aircraft, a proportion of the cost of
the aircraft is allocated to engines and other material
The fair value determined at the grant date of the components with different useful lives to the airframe.
equity-settled share-based payments is expensed on a Judgement is required to determine the amount of
straight-line basis over the vesting period, based on the cost to allocate based on the estimated cost of
Groups estimate of equity instruments that will overhauling the components, and the time between
eventually vest. At each balance sheet date, the Group maintenance events. This judgement affects the
revises its estimate of the number of equity amounts recognised as a depreciation expense given
instruments expected to vest as a result of the effect of the different useful lives of the components.
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.

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
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 4.5m to 8.6m at 31 March 2015 (see note 26).
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.

continued
5. Discontinued operations
On 11 November 2014, the Group entered into a sale agreement to dispose of its share in the joint venture, Flybe
Finland. The disposal was completed on 31 March 2015, on which date control of the Groups share of Flybe
Finland passed to the acquirer.
The loss for the year from discontinued operations was as follows:
2015 2014
m m
Post tax loss of discontinued operation (see below) (2.2) (0.8)

Investment in joint venture impairment charge (10.0)
Interest received 0.2
(12.0) (0.8)
No gain or loss arose on the disposal of the Groups share of Flybe Finland, being the difference between the
proceeds of disposal and the carrying amount of the Groups investment in the joint venture. The investment had
been written down to 1 as at 30 September 2014, and an impairment of 10m recorded.
The results of the discontinued operations, which have been included in the consolidated income statement, were
as follows:
2015 2014
m m
Revenue 117.2 247.9

Expenses (119.7) (248.9)
Loss before tax (2.5) (1.0)
Attributable tax credit 0.5 0.2
Net loss attributable to discontinued operations (attributable to owners of the
Company) (2.2) (0.8)
6. 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 two business segments in order to comply with accounting standards.
The chief operating decision maker responsible for resource allocation and 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 This business segment comprises the Groups main scheduled UK domestic and UK-Europe
passenger operations and revenue ancillary to the provision of those services.
Flybe Aviation This segment aims to provide aviation services to customers, largely in Western Europe. The
Services(FAS) FAS supports Flybes UK activities as well as serving third-party customers.
Flybe Finland No longer a division as discontinued and sold.
Segment revenues and results

Transfer prices between business segments are set on an arms length basis.
2015 2014
m m
Segment revenues:
Flybe UK 550.7 599.6
FAS 40.8 35.4
Inter-segment sales (17.4) (14.5)
Group revenue (excluding investment income) 574.1 620.5

2015 2014
Net
Before restructuring
restructuring costs
Total costs (note 7) Total
m m m m
Segment results:
Flybe UK (including net finance costs of 0.7m in 2015 and
1.4m in 2014) (25.9) 6.9 (0.2) 6.7
FAS 2.3 2.2 2.2
Total segment profit/(loss) before tax (23.6) 9.1 (0.2) 8.9
The Flybe UK segment includes Group costs of 3.6m (2013/14: 3.6m) and revaluation losses on USD aircraft
loans of (10.2)m (2013/14: 8.3m gains).
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.
2015 2014
m m
Segment assets:
Flybe UK 517.0 508.6
FAS 20.2 19.5
Unallocated assets 23.1 6.5
Consolidated total assets 560.3 534.6
Segment liabilities:
Flybe UK (387.7) (329.6)
FAS (4.5) (7.9)
Unallocated liabilities (28.1) (15.5)
Consolidated total liabilities (420.3) (353.0)
Discontinued Operations
2015 2014
m m
Flybe Finland assets 13.4

Flybe Finland liabilities (0.9)
The unallocated assets and liabilities refer to financial instruments, deferred tax and share based payments.
Other segment information
2015 2014
m m
Depreciation and amortisation:

Flybe UK 14.4 14.3
FAS 0.2
14.6 14.3
Investment income:
Flybe UK 0.2 0.3
0.2 0.3
Additions to non current assets:

Flybe UK 96.5 21.2
FAS 8.5
105.0 21.2

continued
6. Business and geographical segments continued

Geographical information
The Groups revenue from external customers by geographical location is detailed below:
2015 2014
m m
Revenue under management from external customers:

United Kingdom 484.5 537.0
Europe excluding United Kingdom 76.6 70.2
Rest of world 13.0 13.3
Group revenue 574.1 620.5
No non-current assets were based outside of the United Kingdom for any of the periods presented other than
joint venture assets. The Flybe interest in Flybe Finland was sold for one Euro as at 31 March 2015, hence at the
period end, no assets/liabilities associated with the Finland joint venture appear in the balance sheet.
Information about major customers

None of the Groups customers exceeded 10% of its Group revenue.
7. Operating profit
2015 2014
m m
This has been arrived at after charging/(crediting):

Depreciation of property, plant and equipment 13.8 13.5
Amortisation of intangible assets 0.8 0.8
(Profit)/loss on the disposal of property, plant and equipment (0.2)
Profit on sale of intangibles (10.5)
Profit on sale of assets held for sale at prior year end (0.4)
Cost of inventories recognised as an expense 14.9 11.7
Reversal of write-downs of inventories recognised in the year (0.7)
Write-down of inventories as a result of restructuring
Operating leases:
Land and buildings 2.6 2.7
Plant and machinery 1.9 1.9
Aircraft 80.6 83.6
Foreign exchange (gains)/losses (1.2) (0.2)
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 0.2
Total audit fees 0.2
Tax compliance and advisory services 0.1
Corporate finance services
Total audit and non-audit fees 0.3
The fees in respect of tax related services provided by the auditor in the year comprise 19,000 in relation to tax
advisory and 15,000 in relation to tax compliance. 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 54. No services were
provided pursuant to contingent fee arrangements.

8. Restructuring
2015 2014
Total Total
m m
Redundancy costs 9.6

Legal, professional and support costs 1.1
Total restructuring costs 10.7
Profit on slot sales (note 14) (10.5)
Net restructuring costs** 0.2
** All 2014 net restructuring costs relate to Flybe UK.
9. Staff costs
The average monthly number of employees (including Executive Directors) was:
2015 2014
No. No.
Flight and maintenance 1,118 1,250

Technical support services 413 564
Administration 319 371
1,850 2,185
The Groups aggregate payroll costs in respect of those persons were as follows:
2015 2014
m m
Wages and salaries 70.6 79.4

Social security costs 8.1 9.0
Other pension costs (see note 35) 5.3 6.6
Share-based payments (see note 34) 0.2 1.5
Amounts payable to temporary staff 4.9 1.5
89.1 98.0
Redundancy costs (see note 7) 9.6
89.1 107.6
In addition to the above, an actuarial loss of 0.6m (2014: actuarial loss of 0.3m) was recognised in the
consolidated statement of comprehensive income in respect of defined benefit pension schemes.
10. Investment income

2015 2014
m m
Interest on bank deposits 1.0 0.6

Net interest (cost)/income on defined benefit costs (see note 35) (0.2) 0.1
0.8 0.7
11. Finance costs

2015 2014
m m
Interest expense on bank loans 1.5 1.7

continued
12. Other gains and losses

2015 2014
m m
Losses/(gains) arising on retranslation of foreign currency loans and deposits (10.2) 8.3
13. Tax on loss/(profit) on ordinary activities

2015 2014
m m
Deferred tax
Origination of temporary differences 0.1 3.7
Reversal of tax losses recognised (3.6)
Total tax charge for the year 0.1 0.1
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:
2015 2014
m m
Loss/(profit) on ordinary activities before tax (35.6) 8.1
Tax on profit/(loss) on ordinary activities before tax at 21% (2014: 23%) (7.1) 1.7
Factors affecting tax charge for the year

Items outside the scope of UK taxation 0.1 0.1
Effect of change in corporation tax rate (0.1) (0.3)
Effect of tax losses 2.4 3.5
(Capital allowances in excess of depreciation)/depreciation in excess of capital allowances 4.8 (4.9)
Total tax charge for the year 0.1 0.1
The further phased reduction in corporation tax rate, as enacted in July 2013, reducing the corporation tax rate to
20% from 1 April 2015, has been reflected by the Group. The Directors are not aware of any other factors that will
materially affect the future tax charge.
14. (Loss)/earnings per share

The calculation of the basic, diluted, adjusted basic and adjusted diluted earnings per share is based on the
following data:
2015 2014
m m
(Loss)/earnings
(Loss)/earnings for the purposes of unadjusted earnings per share,
being net profit/(loss) attributable to owners of the Group (35.7) 8.0
2015 2014
Weighted average number of ordinary shares for the purposes of basic and diluted
earnings per share 216,655,910 82,906,411
(Loss)/earnings per ordinary share basic and diluted (16.5)p 9.6p

(Loss)/earnings per share discontinued operations
The calculation of the basic, diluted, adjusted basic and adjusted diluted earnings per share is based on the
following data:
2015
m
(Loss)/earnings discontinued operations

(Loss)/earnings for the purposes of unadjusted earnings per share,
being net profit/(loss) attributable to owners of the Group (12.0)
2015
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per
share 216,655,910
(Loss)/earnings per ordinary share basic and diluted (5.5)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 2015 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 1,185 ordinary shares on
1 September 2014 and the issue of 790 ordinary shares on 16 September 2014 (141,501,920 ordinary shares on
12 March 2014) as explained further in note 28.
15. Intangible fixed assets

Computer
software in
Landing Computer the course of
rights software construction Total
m m m m
Cost 8.5 10.0 2.9 21.4

At 1 April 2013 0.6 0.7 1.3
Additions
Disposals (8.5) (8.5)
At 31 March 2014 10.6 3.6 14.2
Additions 0.4 4.0 4.4
Disposals
At 31 March 2015 11.0 7.6 18.6
Amortisation
At 1 April 2013 8.2 8.2
Amortisation for the year 0.8 0.8
At 31 March 2014 9.0 9.0
Amortisation for the year 0.8 0.8
At 31 March 2015 9.8 9.8
Net book value

At 1 April 2013 8.5 1.8 2.9 13.2
At 31 March 2014 1.6 3.6 5.2
At 31 March 2015 1.2 7.6 8.8

continued
16. Property, plant and equipment

Plant,
equipment
Land and and motor
buildings vehicles Aircraft Total
m m m m
Cost
At 31 March 2013 24.6 17.0 192.9 234.5
Additions 0.1 0.5 19.3 19.9
Disposals (0.1) (0.1) (2.7) (2.9)
At 31 March 2014 24.6 17.4 209.5 251.5
Additions 0.4 0.2 31.7 32.3
Disposals (0.2) (0.9) (1.1)
Reclassification (0.3) 0.3
At 31 March 2015 24.7 17.7 240.3 282.7
Accumulated depreciation and impairment

At 31 March 2013 4.8 11.8 52.5 69.1
Depreciation charge for the year 0.5 1.4 11.6 13.5
Disposals (0.1) (1.6) (1.7)
At 31 March 2014 5.3 13.1 62.5 80.9
Depreciation charge for the year 0.5 1.3 12.0 13.8
Disposals (0.2) (0.9) (1.1)
At 31 March 2015 5.8 14.2 73.6 93.6
Net book value

At 31 March 2013 19.8 5.2 140.4 165.4
At 31 March 2014 19.3 4.3 147.0 170.6
At 31 March 2015 18.9 3.5 166.7 189.1
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 FAS. 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 216.1m and no impairment was required. The key assumption in the review of Flybe UK was the
weighted average cost of capital used of 10.0%. Only when the weighted average cost of capital is increased to
12.0% does the recoverable amount equal its carrying amount.
17. Joint ventures

2015 2014
m m
Investment in joint ventures 12.4
Details of the joint venture that the Group accounted for in the 2013/14 accounts using the equity method are set
out below:
Country of
incorporation
Equity owned Principal and principal
% activities Holding operations
Airline Ordinary
Flybe Finland Oy 60.0 operations shares Finland
The Flybe interest in Flybe Finland was sold to Finnair for one Euro on 31 March 2015. As such, Flybe no longer
has any investment in any joint ventures.

18. Other non-current assets
2015 2014
m m
Aircraft deposits 3.1 3.1

Aircraft security deposits 7.8 6.9
Aircraft operating lease prepayments 4.3 6.5
Other non-current assets 22.8 25.8
38.0 42.3
19. Inventories
2015 2014
m m
Aircraft consumables 7.1 6.8
7.1 6.8
20. Trade and other receivables

2015 2014
m m
Amounts receivable 34.9 27.1

Allowance for doubtful debts
Trade receivables, net 34.9 27.1
Amounts recoverable on contracts 1.3
Other receivables 47.9 39.1
Prepayments 15.5 18.3
98.3 85.8
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 2015 (2014: zero).
Ageing of trade receivables that are not provided for:
2015 2014
m m
Not yet due 30.9 21.6

30 to 60 days overdue 1.1 2.9
60 to 90 days overdue 2.8 2.2
90+ days overdue 0.1 0.4
34.9 27.1

continued
21. Cash, cash equivalents and restricted cash

2015 2014
m m
Cash and cash equivalents 177.9 177.9

Current restricted cash 10.9 33.9
Non current restricted cash 7.1 6.6
195.9 218.4
Restricted cash comprises:
Aircraft operating lease deposits 4.3 6.6
Aircraft maintenance deposits 7.9 2.6
Other (see note 31) 5.8 31.3
18.0 40.5
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.
22. Trade and other payables

2015 2014
m m
Trade payables 26.4 23.6

Accrued expenses 21.2 24.4
Other payables 48.7 34.0
96.3 82.0
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

2015 2014
m m
Current 77.1 70.7

Non-current 8.3 9.5
85.4 80.2
Deferred income includes government grants totalling 6.6m (2014: 6.7m) for capital financial support towards
the capital costs of the Flybe Training Academy building, a national training centre for the airline industry.
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.
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.
2015 2014
m m
Secured bank loans

Amount due for settlement within 12 months 13.0 10.4
Amount due for settlement after 12 months 106.2 91.1
119.2 101.5
Borrowing costs amounting to 7.6m (2014: 8.4m) were capitalised in relation to qualifying assets. The
capitalisation rate of 10% was used to determine the amount of borrowing costs eligible for capitalisation.

Terms
2015 2014
Interest rate Amount Interest rate Amount
% m % m
Floating rate sterling loans 3.4 28.8 3.2 9.2

Floating rate US dollar loans 2.2 87.4 2.2 87.5
Fixed rate sterling loans 3.1 2.5 3.1 4.2
Fixed rate US dollar loans 5.4 0.5 5.4 0.6
119.2 101.5
The interest rate above relates to the weighted average for the year or period. Floating rates are based upon
LIBOR and GBP base rate with margins of between 0.0% and 3.3%. The loans are repayable over a period to
31 March 2030. 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 2015, the Group had 3.0m of unused borrowing facilities in the form of guarantees (2014: 4.3m).
25. Derivative financial instruments

2015 2014
m m
Current assets
Forward foreign currency contracts/options 14.1
Fuel contracts/options 0.4
Derivative instruments that are designated and effective as hedging instruments carried
at fair value 14.1 0.4
Total derivative financial assets held as current assets 14.1 0.4
Non current assets
Forward foreign currency contracts/options 0.2
Fuel contracts/options
Total derivative financial assets held as non current assets 0.2
Total derivative financial assets 14.3 0.4
Current liabilities
Forward foreign currency contracts/options (7.5)
Fuel contracts/options (27.2) (0.5)
Derivative instruments that are designated and effective as hedging instruments carried
at fair value (27.2) (8.0)
Margin Calls on Derivative instruments 8.3
Total derivative financial assets held as current liabilities (18.9) (8.0)
Non current liabilities
Forward foreign currency contracts/options
Fuel contracts/options (2.6)
Total derivative financial assets held as non current liabilities (2.6)
Total derivative financial liabilities (21.5) (8.0)
Net derivative financial liabilities (7.2) (7.6)
Further details of derivative financial instruments are provided in note 36.

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 Intangible Employee Financial Tax
equipment assets benefits instruments losses Total
m m m m m m
At 31 March 2013 (0.6) 1.0 1.0 (3.4) (2.0)
Recognised in the income statement (1.9) (1.1) (0.1) (0.5) 3.8 0.2
Recognised in other comprehensive income (0.5) (2.2) (2.7)
Effect of rate change 0.2 0.1 0.1 (0.4)
At 31 March 2014 (2.3) (0.6) (1.6) (4.5)
Recognised in the income statement (0.4) 0.5 0.1
Recognised in other comprehensive income (4.1) 0.2 (3.9)
Effect of rate change (0.1) (0.1) (0.2)
At 31 March 2015 (2.8) (4.2) (1.5) (8.5)
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities
2015 2014 2015 2014
m m m m
Property, plant and equipment 3.1 3.9 (0.3) (1.6)

Intangible assets
Employee benefits 4.2 0.6
Financial instruments 1.5 1.6
Tax value of loss carried forward
Tax assets/(liabilities) 8.8 6.1 (0.3) (1.6)
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.
13,046,865 of deferred tax assets have not been recognised in the year (2013/14: nil). 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.
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. On 2 July 2013, 20% was enacted from 1 April 2015. The future 1% main tax rate reductions are
not expected to have a material impact on the financial statements.

27. Provisions
2015 2014
m m
Leased aircraft maintenance 68.8 72.7

EU 261 regulation 6.7
Onerous lease provisions 0.7
Restructuring 4.5
76.2 77.2
Current 51.9 45.3

Non-current 24.3 31.9
76.2 77.2
The Groups provisions are as follows:
Leased
aircraft EU 261 Onerous Restructuring
maintenance regulation lease (note 7) Total
m m m m m
At 31 March 2014 72.7 4.5 77.2
Additional provision in the year 17.3 6.7 0.7 24.7
Utilisation of provision (21.2) (4.5) (25.7)
At 31 March 2015 68.8 6.7 0.7 76.2
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.
Onerous lease provisions are made in respect of the present obligation arising under an onerous contract. The
provision recognised is for any unavoidable net loss arising from the contract, being the lower of the cost of
fulfilling the contract and any compensation or penalties arising from failure to fulfil the contract.
28. Share capital

2015 2014
000 000
Issued and fully paid

216,656,776 ordinary shares of 1p each (2014: 216,654,801) 2,167 2,167
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.
On 1 September 2014, 1,185 ordinary shares of 1 pence were issued, on 16 September 2014, 790 ordinary shares
were issued.
29. Share premium

m
Balance at 31 March 2014 209.2

Premium arising on issue of equity shares
Expenses on issue of equity shares 0.1
Balance at 31 March 2015 209.3

continued
30. Retained deficit

m
Balance at 31 March 2013 (46.0)

Net loss for the year 8.0
Other comprehensive income arising from measurement of defined benefit obligation (1.7)
Credit to equity for equity-settled share-based payments 0.6
Net profit for the year (35.7)
Other comprehensive loss arising from measurement of defined benefit obligation net of
deferred tax (14.3)
Credit to equity for equity-settled share-based payments 0.1
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:
2015 2014
m m
Credit card arrangements 10.0 24.0

Bonds 7.9 7.2
Total 17.9 31.2
Cash deposited to secure the above arrangements as other restricted cash (note 21) 5.8 31.3
Since 31 March 2014, there has been a net reduction of 22.5m in restricted cash, comprising the full release of
1.3m of collateral on bonds and a net reduction of 21.2m in amounts required to secure card acquiring facilities.
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 Aircraft

2015 2014 2015 2014
m m m m
Less than one year 1.3 0.8 71.2 80.1

Between one and two years 0.8 0.6 70.6 73.2
Between two and five years 1.8 1.7 165.2 172.7
More than five years 10.2 9.4 53.3 77.1
14.1 12.5 360.3 403.1
The majority of aircraft operating leases are denominated in US dollars.
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:
2015 2014
m m
Aircraft 100.1 534.9
It is intended that these aircraft will be financed partly though cash flow and partly through external financing
and leasing arrangements.

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.
2015
Weighted
average
exercise
Number of price
share awards
Granted and outstanding at the end of the year 2,751,591

Exercisable at the end of the year
On 21 November 2013, 2,751,951 shares were awarded. Fair value of the award at 31 March 2015 has been
calculated using a Monte Carlo valuation model. The inputs into the valuation are as follows:
2015
Exercise price 78.5p

Share price at 31 March 2015 (the measurement date) 58p
Risk-free rate of interest 0.37%
Flybe volatility 45%
Dividend yield nil
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 nil. The Group has recorded accruals of 0.1m at
31 March 2015.
The weighted average vesting period is 3.375 years.
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 page 75 for further details.

continued
34. Share-based payments continued

Long-Term Incentive Plan (LTIP) continued
The Saad Hammad LTIP (SH Plan) continued
The LTIP award was granted on 1 August 2013. Fair value of the award at 31 March 2015 has been calculated using
a Monte Carlo valuation model. The inputs into the valuation are as follows:
2015
Starting market capitalisation 39.5m

Starting issued share capital 75.2m
Issued share capital at 31 March 2015 (the measurement date) 216.7m
Share price at 31 March 2015 (the measurement date) 58p
Aggregate price paid for new shares 155.7m
Risk-free rate of interest 0.33%
Flybe volatility 45%
Dividend yield nil
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 nil. The Group has recorded accruals of 0.3m at
31 March 2015.
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 share price hurdle at the end of the three-year
period. Awards will vest in full if Flybes 3 month average share price at the end of the 3 year performance period
has met the performance hurdle.
2015 2014
Weighted Weighted
average average
exercise exercise
Number of price Number of price
share awards share awards
Outstanding at beginning of year 1,803,725 2,733,320

Granted during the period 1,037,657
Forfeited during the year (1,803,725) (929,595)
Outstanding at the end of the year 1,037,657 1,803,725
Exercisable at the end of the year
April 2014 award

On 22 April 2014, 450,398 shares were awarded. The 3 month average share price on the date of the award was
1.24. 1,803,725 share options have been forfeited in this financial year. The share award will be available for
exercise on 22 April 2019.
The charge for the year in relation to this scheme was 0.1m.
February 2015 award

On 5 February 2015, a further 587,259 shares were awarded. The 3 month average share price on the date of the
award was 1.06. No share options have been forfeited in this financial year. The share award will be available for
exercise on 4 February 2018.

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 nil (2014: 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 3 months at
14 April 2014 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 100. An option to acquire ordinary shares will be granted to each eligible employee
who entered into the SAYE Contract. On 8 August 2014, 1,659,467 of options over ordinary shares were issued by
the Company for this purpose.
2015 2014
m m
Outstanding at the beginning of the year 470,281 732,716

Granted during the year 1,659,467
Forfeited during the year (18,834) (15,537)
Cancelled during the year (123,206) (137,011)
Expired (435,496) (109,887)
Exercised (1,975)
Outstanding at the end of the year 1,550,237 470,281
The Group recognised expenses of 0.1m in relation to this award in the year to 31 March 2015 (2014: 0.2m).
Summary
The Group recognised total expenses of 0.2m in relation to share-based payments in the year ended
31 March 2015 (2014: 1.5m). The Group has recorded total accruals in respect of the LTIP schemes of 0.4m at
31 March 2015.
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 5.3m (2014: 6.6m) represents contributions payable to these schemes by
the Group at rates specified in the rules of the plans.

continued
35. Employee benefits continued

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 2015,
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 2015. The present value of the defined benefit obligation, the related current service cost,
and the 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.
The principal assumptions used for the purpose of the actuarial valuation were as follows:
Valuation at
2015 2014
% %
Key assumptions used:

Discount rate 3.5 4.6
Expected rate of salary increases n/a n/a
Future pension increases 3.5/2.1 3.6/2.4
RPI inflation 3.1 3.4
The post-retirement mortality rate assumed at 31 March 2015 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 (2014: the mortality rate was also based on SAPS).
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
2015 2014
Assumption Change in assumption m m
Discount rate Increase by 0.1% (3.6) (2.9)

Rate of inflation Increase by 0.1% 2.4 2.0
The amount included in the balance sheet arising from the Groups obligations in respect of its defined retirement
benefit scheme is as follows:
2015 2014
m m
Present value of defined benefit obligations (164.9) (132.3)

Fair value of scheme assets 143.9 129.8
Net (deficit)/surplus (21.0) (2.5)
Recognised net liability from defined benefit obligation (21.0) (2.5)
Amounts recognised in the consolidated income statement in respect of the defined benefit scheme are as
follows:
2015 2014
m m
Administration costs 0.4 0.4

Net interest receivable (see note 9) 0.2 (0.1)
Charge to profit or loss before tax 0.6 0.3

Re-measurements recognised in the consolidated statement of comprehensive income are as follows:
2015 2014
m m
Return on scheme assets in excess of interest 11.9 (1.5)

Experience losses on liabilities (2.2)
Losses arising from changes in financial assumptions (28.5)
Losses arising from changes in demographic assumptions (2.0)
Change in effect of asset ceiling1 4.0
Total re-measurements (18.6) 0.3
1 Due to the limit set out in paragraph 64 of IAS 19.
Movements in the present value of defined benefit obligations were as follows:
2015 2014
m m
Opening defined benefit obligation 132.3 129.3

Interest cost 6.1 5.8
Benefits paid (3.8) (5.0)
Actuarial loss arising from changes in financial assumptions 28.3
Actuarial loss arising from changes in demographic assumptions 2.0
Actuarial loss arising from experience adjustments 2.2
Closing defined benefit obligation 164.9 132.3
Movements in fair value of scheme assets were as follows:
2015 2014
m m
Opening fair value of scheme assets 129.8 130.8

Interest income 5.9 5.9
Benefits paid (3.8) (5.0)
Administration costs (0.4) (0.4)
Employer contributions 0.5
Actuarial (loss)/gain on scheme assets 11.9 (1.5)
Closing fair value of scheme assets 143.9 129.8
The analysis of the scheme assets and the return on those assets at the balance sheet date were as follows:
2015 2014
m m
Fair value of assets

Equities 62.9 58.4
Bonds and gilts 79.6 71.3
Cash 1.4 0.1
143.9 129.8
Actual return on scheme assets 4.5% 4.5%

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
2015 2014
Carrying Fair Carrying Fair
value value value value
m m m m
Financial assets
Cash, cash equivalents and restricted cash 195.9 195.9 218.4 218.4
Loans and receivables:
Trade and other receivables 111.8 111.8 98.9 98.9
Derivative instruments in designated hedge accounting
relationships 14.3 14.3 0.4 0.4
Financial liabilities
Liabilities held at amortised cost:
Trade and other payables (48.6) (48.6) (36.8) (36.8)
Debt (119.2) (122.5) (101.5) (103.9)
Liabilities held at fair value through other comprehensive income:
Derivative instruments in designated hedge accounting
relationships (21.5) (21.5) (8.0) (8.0)
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 2015

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).

The following table provides an analysis of the Groups financial instruments, all of which are grouped into
Level 2:
2015 2014
m m
Foreign exchange derivatives 14.3 (7.5)

Margin calls 8.3
Fuel derivatives (29.8) (0.1)
At 31 March (7.2) (7.6)
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.
Capital Management and 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:
2015 2014
m m
Debt (119.2) (101.5)

Cash, cash equivalents and restricted cash 195.9 218.4
Net cash 76.7 116.9
Equity 140.0 194.1
Net debt to equity ratio (54.8)% (60.2)%
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.

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:
Weighted
average
effective Within Over
interest rate 1 year 1-2 years 2-5 years 5 years Total
% m m m m m
2015
Financial assets:
Cash, cash equivalents and restricted cash
(variable interest rates) 0.1 187.7 1.5 6.7 195.9
Loans and receivables 104.2 5.4 2.3 111.9
Financial liabilities:
Trade and other payables (48.6) (48.6)
Borrowings:
Variable interest rates 2.5 (11.5) (14.1) (34.0) (59.6) (119.2)
Fixed interest rates 3.5 (1.9) (0.7) (0.7) (3.3)
2014
Financial assets:
Cash, cash equivalents and restricted cash
(variable interest rates) 0.1 211.8 0.7 5.9 218.4
Loans and receivables 66.2 25.8 6.9 98.9
Financial liabilities:
Borrowings:
Variable interest rates 2.3 (8.4) (11.4) (25.0) (54.1) (98.9)
Fixed interest rates 3.4 (2.0) (1.8) (1.2) (5.0)
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 Within
1 year 2 years Total
m m m
2015
Net settled derivatives:
Fuel derivatives (27.2) (2.6) (29.8)
Gross settled derivatives:
Foreign currency payments 14.1 0.2 14.3
(13.1) (2.4) (15.5)
2014
Net settled derivatives:
Fuel derivatives (0.1) (0.1)
Gross settled derivatives:
Foreign currency payments (7.5) (7.5)
(7.6) (7.6)

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 2015 or 31 March 2014.
The following table summarises the Groups derivative financial instruments that are used to mitigate the
exposures described above:
Fair value
Foreign Contract of asset/
Average currency value (liability)
exchange rate $m m m
At 31 March 2015 $1.6191 253.0 156.3 14.3
At 31 March 2014 $1.5801 233.1 147.5 (7.5)
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:
2015 2014
m m
Percentage increase 1% 1%
US Dollar (m) 0.5 0.5
Euro (m) 0.1 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 adjusted results.
The carrying value of the Groups foreign currency denominated non-derivative monetary assets and liabilities at
the balance sheet date is as follows:
2015 2014
m m
Assets
Euro:
Restricted cash 0.9
Trade receivables 8.4 4.3
US Dollar:
Restricted cash 7.9 12.9
Trade receivables 2.9 1.4
27.2 26.4
Liabilities
Euro:
US Dollar:
Debt (87.9) (88.1)
(100.8) (101.5)

continued
36. Financial instruments continued

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 2015, the Group has identified 99 (2014: 86) contracts for foreign exchange purchases and
102 (2014: 70) 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 1.3m (2013: 10.4m) 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:
2015 2014
Percentage increase 1% 1%
Impact on profit/(loss) before tax and equity (m) (1.2) (1.0)
Credit risk management

Disclosures in respect of credit risk management for trade and other receivables are provided in note 20.
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 18.7% and 20.1% of Flybe
UK segment costs in the years ended 31 March 2015 and 2014 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 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 70% of the following years budgeted fuel
consumption as at 31 March 2015 (2014: 71.7%). The amount of fuel actually consumed was 2.0% less than
anticipated for the year ended 31 March 2015 (2014: 6.1% less than anticipated).
The actual number of emissions credits purchased for calendar year 2014 amounted to 448.9 tonnes, including
free allowances of 222.8 tonnes, the average price of the purchased allowances was 5.04.
Carbon emissions requirements for calendar year 2015 currently are expected to amount to 544.4 tonnes

including free allowances of 222.8 tonnes. So far the Group has purchased 100% of its requirement for 2015 at an
average cost of 5.40.
The following table details the fair values of forward fuel price contracts outstanding at each balance sheet date:
2015 2014
m m
Fair value of contracts to buy fuel expiring

In less than 3 months (7.5) 0.1
Between 3 and 6 months (9.1)
Between 6 and 12 months (12.0) (0.2)
More than 12 months (1.2)
(29.8) (0.1)
The highs and lows recorded in each period for jet fuel prices were as follows:
2015 2014
Price per Price per
tonne tonne
$ Date $ Date
19 June 29 Aug
High 1,010 2014 1,047 2013
13 January 01 May
Low 507 2015 883 2013
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:
2015 2014
Percentage increase in cost of fuel 10% 10%

Impact on profit/(loss) before tax and equity (m) (3.9) (4.8)
37. Related parties

Group companies entered into the following transactions with related parties which are not members of the
Group:
Sales of services
2015 2014
m m
Preston Travel (CI) Limited* 1.2

Flybe Finland Oy 4.0
* Period until 12 November 2013 when Rosedale Aviation Holdings Limited ceased to be a related party.
Amounts owed by related parties

2015 2014
m m
Preston Travel (CI) Limited* 0.3

Flybe Finland Oy** 0.6
* As at 12 November 2013 when Rosedale Aviation Holdings Limited ceased to be a related party.
** As at 31 March 2015, the Flybe interest in Flybe Finland was sold. Therefore Flybe Finland 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 previously 60.0% owned operation, Flybe Finland. At 31 March 2015,
7.5m (2014: 2.7m) was owed in respect of revenue collected on behalf of Flybe Finland and a further 2.9m
(2014: zero) was owed in respect of ETS credits purchased on behalf of Flybe Finland.

continued
37. Related parties continued
Purchases of services
2015 2014
m* m
Edenfield Investments Limited 0.2

Downham Properties Limited 0.2
* 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 (2014: 0.4%).
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.
2015 2014
m m
Key management emoluments 1.0 1.8

Company contributions to personal pension schemes 0.2 0.2
Exit payments 0.7
1.2 2.7
Exit payments are due to be made to former Directors as described further in Directors remuneration on
page 76 and include nil of company contributions to personal pension schemes.
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:
2015 2014
000 000
S Charles 32
A Knuckey 20
There are no other transactions or balances with key management.

Company balance sheet
At 31 March 2015
2015 2014
Notes m m
Non-current assets
Investments in subsidiaries 39 60.4 63.6
Current assets
Other receivables 40 171.9 189.3
Total assets 232.3 252.9
Current liabilities
Trade and other payables 41 (0.5)
Non-current assets
Liability for share-based payments 34 (0.4) (0.9)
Total liabilities (0.4) (1.4)
Net assets 231.9 251.5
Equity attributable to owners of the Company
Share capital 42 2.2 2.2
Share premium account 42 209.2 209.2
Merger reserve 6.7 6.7
Capital redemption reserve 22.5 22.5
Retained earnings (8.7) 10.9
Total equity 231.9 251.5
The financial statements of Flybe Group plc, registered number 1373432, were approved by the Board of
Directors and authorised for issue on 9 June 2015.

Company statement of changes in equity
Capital Retained
Share Share Merger redemption earnings/ Total
capital premium reserve reserves (deficit) equity
m m m m m m
Balance at 1 April 2013 0.7 60.6 6.7 22.5 (42.4) 48.1
Profit for the year 52.7 52.7
Share capital issued 1.5 154.2 155.7
Share issue expenses (5.6) (5.6)
Equity settled share based payment
transactions 0.6 0.6
Balance at 31 March 2014 2.2 209.2 6.7 22.5 10.9 251.5
Loss for the year (18.6) (18.6)
Share capital issued
Share issue expenses
Equity settled share based payment
transactions (1.0) (1.0)
Balance at 31 March 2015 2.2 209.2 6.7 22.5 (8.7) 231.9
Company cash flow statement

2015 2014
m m
Operating profit
Dividends received from subsidiaries 19.0
Impairment of investments in subsidiaries 21.7 (9.6)
Reversal of provision for doubtful debts on inter-company balances 43.3
Credit to equity for share-based payments (1.0) 0.6
Increase in receivables 17.5 (214.4)
Increase in payables (0.5) 0.5
Increase in employee benefits (0.5) 0.9
Net cash flows from operating activities 37.1 (159.7)
Cash flows from investing activities

Impairment of investments in subsidiaries 9.6
Net cash flows from investing activities 9.6
Financing activities
New equity raised 150.1
Net cash raised from financing activities 150.1
Net increase/(decrease) in cash and cash equivalents 37.1

Cash and cash equivalents at beginning and end of year

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 loss for the year was (18.5m) (2014: profit of 52.7m).
39. Subsidiaries and related companies
Cost of investment
At 31 March 2014 73.2
Capitalisation of inter-company balances into investments 18.5
At 31 March 2015 91.7
Provision for impairment

At 31 March 2014 (9.6)
Impairment (21.7)
At 31 March 2015 (31.3)
Net book value

At 31 March 2014 63.6
At 31 March 2015 60.4
The inter-company balance with Flybe Holdings Ltd has been capitalised by way of a loan release to the value of
18.5m.
Details of the Groups subsidiaries and related companies at 31 March 2015 are as follows:
Proportion of Proportion of
ownership voting power
Place of incorporation interest3 held
Registration number and operation % %
Flybe Limited 2769768 Great Britain 100 100

Flybe Aviation Services Limited1 3951235 Great Britain 100 100
Walker Aviation Leasing (UK) Limited 2426112 Great Britain 100 100
British Regional Air Lines Group Limited2 3261376 Great Britain 100 100
Flybe Leasing Limited2 5516372 Great Britain 100 100
Flybe Holdings Limited 5516372 Great Britain 100 100
British European Airlines Limited1 3946527 Great Britain 100 100
Flybe Ireland Limited1 524265 Ireland 100 100
Flybe Ireland Limited2 8389074 Great Britain 100 100
British Regional Air Limited2 2563034 Great Britain 100 100
Flybe.com Limited2 4252085 Great Britain 100 100
1 Indirectly held by Flybe Group plc.
2 Dormant entities the Company is exempt from the requirement to prepare individual accounts in line with s394A of The Companies Act
2006.
3 Ordinary Shares.

Notes to the Company financial statements
continued
40. Other receivables

Amounts due from Group undertakings
Amounts due from Group undertakings are 171.9m (2014: 189.3m). The carrying amount of trade and other
receivables approximates to their fair value.
There is no allowance for doubtful debts as there are no inter-company balances that are not viewed as
recoverable. A provision for doubtful debts for inter-company balances of 43.3m was released in 2013/14. All
receivables that are not provided are not yet due.
41. Trade and other payables

Accruals
There are no accruals in 2015 (2014: 0.5m which comprised 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 488.6m
(2014: 524.4m).

Five-year summary
Year ended 31 March
2011 2012 2013 2014 2015

m m m m m
Financial measures
Group revenue 595.5 615.3 614.3 620.5 574.1
EBITDAR1 87.2 85.8 55.5 98.7 69.4

Operating profit/(loss)2 (0.9) (4.9) (34.7) 0.8 (12.4)
Profit/(loss) before tax2 (4.3) (6.8) (41.1) 8.1 (35.6)
Earnings/(loss) per share (basic) 6.4p (8.5)p (56.0)p 9.6p (16.5)
Aircraft (at net book value) 110.9 136.9 140.4 147.0 166.4
Net (debt)/funds 21.9 (29.7) (66.3) 116.9 76.7
Operating cash flow before restructuring 18.1 3.0 (1.6) 7.3 30.1
2011 2012 2013 2014 2015
Operating measures3
Average number of operating aircraft 68.3 61.3 59.9 56.6 58.7
Scheduled sectors flown 138,200 137,400 132,600 130,200 127,000
Scheduled seats flown 11,620,600 11,610,400 11,298,200 11,144,400 10,293,600
Scheduled sold seats 7,166,200 7,325,200 7,245,100 7,742,100 7,743,633
Passenger yield 76.15 77.21 76.16 71.55 68.62
Scheduled load factor 61.7% 63.1% 64.1% 69.5% 75.2%
1 EBITDAR redefined to be profit/(loss) before tax after adding back net finance costs, taxation, depreciation, amortisation and aircraft rental
Other information
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 stated are for Flybe UK.

Glossary
Air Operators Certificate (AOC) Fuel burn per seat

an air operators certificate issued by the national jet kerosene used, divided by number of seats flown
regulator the Civil Aviation Authority in the UK and
the Transport Safety Agency, Trafi, in Finland GHG
greenhouse gas
Air Passenger Duty (APD)
an excise duty which is charged by the UK and other GWP
governments on the carriage of passengers flying from global warming potential
an airport within that governments territory
IATA
BTECs International Air Transport Association
vocational awards formerly issued by the Business and
Technology Education Council and now issued by IPO
Edexcel the admission, through an Initial Public Offering, of the
Companys shares to the Official List of the London
Civil Aviation Authority (CAA) Stock Exchange on 15 December 2010
the civil aviation regulatory authority of the UK,
Channel Islands and the Isle of Man load factor
sold seats (Flybe ticketed passengers on either Flybe
codeshare operated scheduled services or hardblock routes
an arrangement whereby multiple airlines sell seats on operated by the codeshare partner) divided by
the same flights and multiple flight designators and scheduled available seats (seats available for
flight numbers are used for the same flight passenger occupancy on scheduled services)
contract flying MRO

a leasing agreement whereby an aircraft (together with maintenance, repair and overhaul
its operating crew), maintenance, support and
insurance are provided from one party to another, passenger
otherwise known as an ACMI agreement a person with an issued ticket where the ticket has
charged a fare and/or a passenger surcharge and tax
domestic (if applicable)
passengers from one UK airport (including the Channel
Islands and the Isle of Man) travelling to another UK passenger yield
airport (including the Channel Islands and the Isle of total passenger revenue per passenger (after the
Man) deduction of government taxes and levies)
eco-label rating passenger revenue per seat

a rating, introduced by Flybe, concerning the passenger revenue (fare revenue + ancillary revenue)
measurement of aircraft performance in respect of generated divided by scheduled available seats (seats
noise and greenhouse gas emissions, during operation available for passenger occupancy on scheduled
services)
effective exchange rate
the cost of currency for a period implicit through the purchase rights
weighted average cost of (i) currency acquired through the right to purchase additional aircraft under the same
forward contracts and (ii) currency bought in the spot terms and conditions as for firm and option aircraft.
markets Such rights to be exercised within a finite time
EASA regional aircraft

European Aviation Safety Agency turboprop aircraft and regional jets of 120 seats or less
ETS regional airline

Emissions Trading Scheme an airline that flies predominantly regional aircraft
Flybe Finland regional branded airline

Flybe Finland Oy (formerly Finnish Commuter Airlines a regional airline flying aircraft under its own name and
Oy) of which 60% was owned by Flybe and 40% by colours
Finnair Oyj
regional UK
Flybe Nordic AB an airport or destination in the UK (including the
joint venture between Flybe and Finnair Oyj Channel Islands and the Isle of Man) but excluding
incorporating Flybe Finland Oy 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
Other information
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

Notes

Designed and produced by Instinctif Partners
www.instinctif.com
Printed by Pureprint Ltd
Pureprint Ltd is FSC certified, ISO 14001 certified showing that it is committed to all round
excellence and improving environmental performance is an important part of this strategy.
We aim to reduce at source the effect our operations have on the environment, and are
committed to continual improvement, prevention of pollution and compliance with any
legislation or industry standards.
Pureprint Ltd is a CarbonNeutral Printing Company.
The paper used for the front cover and pages 1-80 of the report contains material sourced
from responsibly managed forests, certified in accordance with the FSC (Forest Stewardship
Council) and is manufactured to ISO 14001 and EMAS (Eco-Management and Audit Scheme)
international standards, minimising negative impacts on the environment.
The paper used for pages 81-132 of this report is produced using FSC mix pulp which is fully
recyclable, biodegradable, pH Neutral, heavy metal absence and acid-free. It is manufactured
within a mill which complies with the international environmental ISO 14001 standard.

Flybe Group PLC Annual Report FY 2015

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Flybe Group PLC Annual Report FY 2015

Uploaded by

Copyright:

Available Formats

continuing our

(35.6)m (25.4)m 16.6m

Strategic report 02 Financial and other information 80 See all our

iii Flybe Group plcAnnual Report and Accounts 2014/15

Our ambition is to be the best

Flybe Group plcAnnual Report and Accounts 2014/15 01

A year of good progress

Simon Laffin Delivering this new strategy required management to

Much progress has been made over the first complete

02 Flybe Group plcAnnual Report and Accounts 2014/15

Because we are regional, unlike most other airlines,

Flybe Group plcAnnual Report and Accounts 2014/15 03

Board Annelie Carver joined as General Counsel and

04 Flybe Group plcAnnual Report and Accounts 2014/15

Flybe Group plcAnnual Report and Accounts 2014/15 05

Turnaround Chapter 1: Restructuring

The improvements we launched were designed

06 Flybe Group plcAnnual Report and Accounts 2014/15

Flybe Group plcAnnual Report and Accounts 2014/15 07

Restructuring Rebirth of Flybe

>>The purple Flybe new, invigorated culture

Jan 2013 March 2014 April 2014

08 Flybe Group plcAnnual Report and Accounts 2014/15

Legacy issues resolved and foundations Profitable growth

Jan 2015 April 2015 20152016

Flybe Group plcAnnual Report and Accounts 2014/15 09

>>Operational delivery including schedule reliability

10 Flybe Group plcAnnual Report and Accounts 2014/15

Safety underpins Roll-out of Flybe Safety Promise, new safety training

Customer satisfaction Improvement in 55% customer satisfaction

Reliability Improve overall reliability of the fleet above

Load factor Deliver minimum 70% load factor as

Revenue Deliver year-on-year improvement in

Cost Deliver a reduction in year-on-year Cost per Seat.

Drive year-on-year improvement in aircraft utilisation.

EBITDAR Improve EBITDAR as a % of revenue.

ROCE Deliver ROCE in excess of cost of capital.

Cash Maintain a minimum total cash balance equivalent

Flybe Group plcAnnual Report and Accounts 2014/15 11

How we are different

Flybe branded Flying thin Connecting Faster and

Translates into time-saving access to the world from the regions

Capital allocation Cost

Revenue/customer >>Optimise productivity

12 Flybe Group plcAnnual Report and Accounts 2014/15

Improved shareholder returns

Margin expansion Network development

Improved asset turn

Flybe Group plcAnnual Report and Accounts 2014/15 13

To be the best local

The four strategy drivers

Revenue growth Following a significant planned

Cost reduction Constant cost focus across the

Asset utilisation Continually improve the utilisation

Profit delivery Continued sustainable growth

14 Flybe Group plcAnnual Report and Accounts 2014/15

Cost to dispose of the E195s.

Flybe Group plcAnnual Report and Accounts 2014/15 15

16 Flybe Group plcAnnual Report and Accounts 2014/15

Flybe Group plcAnnual Report and Accounts 2014/15 17

Contract flying is not confined to Scandinavia, with two

18 Flybe Group plcAnnual Report and Accounts 2014/15

Manhours in the MRO and FAS increased by 17.4% to

Strategic report 02 Financial and other information 80 See all our