Bangkok--2 Jul--Centre for Aviation Europe's largest regional carrier, Flybe, stated on 30-Jun-08 that it forecasts record profits in its upcoming full year results, and that it will “not only survive, but prosper in these difficult times”. According to CCO, Mike Rutter, the carrier's break-even load factor has fallen and it has a “rigorous fuel hedging policy”, currently hedged at 76% for the rest of the year. Fuel at current prices makes up 24.6% of the carrier’s cost base, according to Flybe. Mr Rutter stated, "while we couldn’t have predicted the size of the increase in the oil price, we were clear it was going to go up. We were also clear two years ago that consumers’ appetite for visiting places they had never heard of would wane, dented by a weaker economy and by a consumer backlash to the service attitude of some hard-core low cost airlines". The bullish statements are part of the carrier’s response to comments last month by Ryanair that the survival of Flybe and other UK rivals could be threatened by the current harsh operating environment. On paper, Flybe does appear heavily exposed to an economic downturn in the UK, with almost 87% of the carrier’s capacity dedicated to the UK market. But its broad customer base gives Flybe management confidence the carrier would allow it to survive the current combination of high oil prices and slowing growth in demand. The carrier launched a corporate traveller programme in 2002 and business passengers now account for 20% of total traffic. The airline targets carrying 8 million passengers in 2008. Mr Rutter added, “we have the very beneficial position of picking up those [passengers] who are downshifting from the majors on a price basis — a lot from Lufthansa and Air France, and the legacy carriers. We also get a lot up-shifting from ‘hardcore’ low-cost carriers because our prices aren’t that far away, but we provide a better product/service balance”. Like Ryanair, Mr Rutter anticipates weaker carriers will be acquired and consolidated and Flybe will remain “acquisitive” during the period. The carrier recently entered a franchise agreement with Scotland’s Loganair. Flybe is going against the trend of network contraction this year, with plans to operate 25 Loganair routes “under Flybe colours” for the first time this Winter 08/09. However, Flybe is suspending Belfast City-Paris Charles de Gaulle service shortly — just three months after it was launched on 30-Mar-08, due to high costs and weak demand. With its heavy focus on the UK, it is unsurprising Flybe CEO, Jim French, is seeking greater competition in the UK airport sector, throwing his support behind calls the break-up of the British Airports Authority (BAA). British Airways recently dropped its calls for the break-up of BAA, stating such a move could jeopardise the development of a third runway at Heathrow. The UK Competition Commission, which indicated BAA may have to sell Heathrow, Gatwick or Stansted, will publish a full report into airport ownership in Aug-08.