Advertisement

  1. ITV Report

Flybe puts itself up for sale following profit warning

The Exeter-based airline has put itself on the market. Photo: PA Images

Exeter-based airline Flybe has put itself up for sale, just weeks after announcing a profit warning.

The carrier said it is also looking at cutting further costs and flight capacity as it battles challenging conditions in the airline industry.

The group is in talks with a number of "strategic operators" about a potential sale. It comes weeks after Flybe issued a profit warning due to falling demand, a £29 million hit from rising fuel costs and the weak pound.

The alert sent shares tumbling by more than a third on the day and nearly 75% has been wiped off its stock market value since December.

Stobart Group walked away from a bid for Flybe in March after the two firms failed to agree terms. But Stobart, which already has a franchise agreement with Flybe, could reportedly come back into the frame.

The airline announced a profit warning last month. Credit: PA Images

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, and flies to destinations across the UK and Europe. It carries around eight million passengers a year.

Chief executive Christine Ourmieres-Widener said the group continued to see improvements in the third quarter and added that cost savings had already helped to drive progress in boosting profits.

There has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs. We are responding to this by reviewing every aspect of our business especially further capacity reduction, cash management and cost savings.

– Christine Ourmieres-Widener, Chief Executive

In half-year results also announced on today, Flybe saw cost-cutting help lift underlying pre-tax profits to £9.9 million from £9.2 million a year earlier.

Statutory pre-tax profits for the six months to September 30 more than halved to £7.4 million from £16.1 million a year earlier.

It saw group revenues fall 10% or 2.4% on an underlying basis to £409.2 million after it cut capacity by 9%. Passenger numbers edged 0.6% higher to 5.2 million.

The group has hired Evercore as adviser to help with the review and sales process.