1. ITV Report

Exeter-based carrier hopes to save £26m in latest round of cost-cutting

Flybe aeroplane Photo: PA

Flybe has warned that it plans to axe another 500 jobs in the latest round of cost-cutting at the struggling regional airline business.

The carrier's new chief executive, Saad Hammad, will also review unprofitable routes and bases and improve aircraft and crew utilisation.

The measures are expected to save the airline £26 million a year from next year, on top of previous initiatives to save #40 million this year and £45 million in 2014/15.

This will require tough decisions to be taken over the coming months and, regrettably, this proposal may result in the loss of around 500 jobs spread across the business

– Flybe company spokesman

Consultation with trade union and staff association representatives on the proposals will start shortly.

The British Airline Pilots' Association (Balpa) said it was shocked by the announcement and called on the Government to play its part by reducing the impact of Air Passenger Duty.

This is a distressing day for the dedicated pilots who loyally serve Flybe and its passengers day in, day out and we will be supporting them throughout this difficult redundancy process.

Pilots are working with Flybe to secure the future of the airline, which is vital to connecting the country and driving growth and prosperity outside of London.

– Balpa general secretary Jim McAuslan

This is clearly a very difficult time and Unite will be doing everything possible to provide support to the workforce.

Over the coming weeks the union will scrutinise every inch of the company's business plans in order to protect as many jobs as possible and to avoid compulsory redundancies.

The company has been open with the union about its plans and we hope to use this relationship in order to mitigate the impact of this decision.

– Unite union national officer, Oliver Richardson

The airline's half-year results showed it grew passenger numbers by 5.6% to 4.3 million, while it returned to profit with a surplus of £13.8 million.

The carrier's new chief executive, Saad Hammad joined Flybe in August.

It was clear to me that the existing phase one and two cost savings were necessary, but we simply needed to do more and to do it immediately.

The business needed action now and so today we are explaining our next phase which encompasses a review of everything we do and how we do it.

We are going to shrink to grow. Without these proposed cuts we cannot be viable.

– Flybe Chief Executive, Saad Hammad

Flybe currently employs around 2,700 people, with some 650 staff having left the business since last January.