Flybe shares in tailspin as airline issues profit alert

Progress but market 'softening'
Progress but market 'softening'

Regional airline Flybe saw shares nosedive after it warned over full-year profits following easing demand and a £29 million hit from rising fuel costs and the weak pound.

The low-cost UK carrier said it is now expecting to report worse-than-expected losses of around £12m for the year to the end of March 2019, even with a £10m one-off boost to its accounts.

Shares plummeted by as much as 39% after the alert.

It comes just six months after the last profit warning from the group, which also suffered amid the Beast From The East snow and freezing weather disruption earlier in the year.

In its latest half-year update, Flybe said as well as an expected £29m impact from fuel costs and a fall in the value of sterling, it was also seeing consumer demand weaken in domestic and near-continent markets in recent weeks.

This is set to continue into its second half, it cautioned.

CEO Christine Ourmieres-Widener said: “We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market.

“We are reviewing further capacity and cost-saving measures while continuing to focus on delivering our sustainable business improvement plan.”

The gloomy outlook comes despite a solid first half for Flybe as its boss pushed ahead with a turnaround.

It expects to hold interim underlying pre-tax profits largely firm against the £9.4m posted a year earlier, despite cost increases of around £17m.