Flybe shares sink on profit warning

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Flybe shares have fallen more than a third after issuing a profit warning, blaming poor demand, a weaker pound and higher fuel costs.

The airline said in a trading update it now expects a full-year loss of £12m – more than triple the figure analysts had expected.

That will include a £29m hit from weak sterling and a rise in fuel prices.

Flybe said passenger revenue per seat rose 6.8%, while the number of seats filled was up 7.2% year-on-year.

Christine Ourmieres-Widener, chief executive of Flybe, said the market had softened in recent weeks after increasing revenues in the summer season.

“We are reviewing further capacity and cost-saving measures. Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs,” she said.

“We continue to strengthen the underlying business and remain confident that our strategy will improve performance.”

In June, the Exeter-based airline reported an annual pre-tax loss of £19.2m, which it said was due to poor winter weather, a major IT overhaul and additional maintenance costs.

At the time, aviation economist Peter Morris said the UK economy had affected Flybe’s performance as well as the weather.

Shares fell 11.1p to 21.1p, valuing the firm at just £63m.

Flybe has 78 planes, two fewer than at the end of March.

Its interim results will be issued on 14 November.