Flybe shares fall as airline issues profits warning
A further fall in demand for domestic flights in the UK over recent months triggered a profits warning at airline Flybe yesterday.
Shares in Flybe fell more than 20% after Europe's biggest regional flier said revenues in the final three months of 2011 would be significantly lower than hoped, fuelling fears of a full-year loss.
Flybe said the UK domestic market suffered a sales decline of 8% in its third quarter compared to a 6% drop in the previous half-year, with December "particularly disappointing".
It is understood that Flybe kept its prices broadly flat despite the rising price of fuel.
Investec analyst Andrew Fitchie predicted Flybe will now make a loss of £8.5m in the year to March 31, compared to previous predictions of a profit of £6.4m. And he anticipates further losses of £1.3m the following year.
Jim French, chairman and chief executive, insisted Flybe has "a strong future in the medium and long-term".