Airline puts itself up for sale as £22m loss is forecast

Economy In the media

The British airline Flybe has confirmed that it is seeking a buyer weeks after warning shareholders that it was facing a £22m full-year loss.

Board members at the Exeter-based operator say they are holding talks with a number of interested parties about a potential sale.

Flybe issued a profit warning last month, citing high fuel costs, a falling pound and reduced demand, in addition to fierce competition in the airline market.

The latest results released this week show pre-tax profits fell 54 per cent for the six months to September 30, with revenues down 2.4 per cent to just over £419 million.

A Flybe spokesman said other options being looked at included cutting flights, but insisted that there was no threat to existing bookings.

Flybe shares have plummeted by 75 per cent in two months but they rose 37 per cent today after news of the review was announced.

The airline was valued at £215 million when it was floated on the stock exchange eight years ago, but its value has now fallen to around £25 million.

The British Airline Pilots’ Association (BALPA) said on Twitter that Flybe’s 2,300 UK staff would be “very worried” by the news that the company is for sale.

BALPA said its priority would be to protect jobs and that it expected to be “fully consulted” by Flybe and potential buyers over their plans for the future.

Flybe has almost 80 planes flying from regional airports such as London City, Southampton and Aberdeen to UK and European destinations.

The airline’s origins go back to 1979 and it now carries around eight million passengers a year.

Company chief executive Christine Ourmieres-Widener said last month it was reviewing its “capacity and costs”.

She added: “Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months.”

Prospective suitors for the airline are said to include Stobart Group, owners of Southend Airport and IAG, parent company of British Airways.

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