Flybe flounders as losses soar

Struggling regional airline Flybe flew further into the red today, blaming lower demand for domestic flights, high fuel bills and airport charges. Annual pre-tax loss slumped to £40.7 million from a £6.2 million loss a year earlier.

The plunge came in spite of Flybe’s recently axeing 490 staff — more than a fifth of its employees — to save money. The carrier is also cutting pilots’ salaries by up to 5 per cent.

Flybe’s founder and chief executive Jim French last month pulled the airline out of Gatwick, selling all its 25 daily slots at the airport to easyJet for £20 million.

The airline — Europe’s largest regional carrier — has also deferred the arrival of 16 new jets due for delivery in the next two years, delaying the need to pay out £20 million.These measures enabled Flybe to say it had beaten its £25 million target for cost-cutting, and it predicts it will knock £30 million off its costs from next year, and save £50 million a year from 2014. But French admitted the results were “disappointing.” He added: “During the year, we have taken difficult decisions as part of our turnaround plan, which have affected all our people… These decisions were critical to ensuring the future success of Flybe.” Shares rose 3.25p, or 7.88 per cent, to 44.5p.