Flybe to cut 500 jobs in cost-cutting drive
Flybe has revealed it will axe another 500 jobs in a cost-cutting drive that will also see the regional airline review unprofitable routes and bases.
New chief executive Saad Hammad said that without the latest restructuring the Exeter-based carrier, which employs 2,700 people, cannot be viable.
The former easyJet chief commercial officer, who joined the company in August, said: "We need to cut costs and make efficiency improvements.
"Our original concept of regional connectivity was a sound one but we have executed that very, very badly in recent years. We want to execute it very well."
He took over the top job from Jim French who ran the company for 12 years from 2001 and oversaw a major expansion and stock market float.
Since hitting a period of turbulence Flybe has focused on shoring up its core regional bases in Southampton, Manchester, Birmingham and the Channel Islands, while selling its Gatwick Airport runway slots to easyJet.
Mr Hammad said: "We are going to shrink to grow. Without these proposed cuts we cannot be viable."
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.
The airline, which has reduced its staff by 650 since January, said the latest job losses would be "almost exclusively in the UK" but Mr Hammad could not yet give details of which roles would go.
Consultation with trade union and staff association representatives on the proposals will start shortly.
However 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 on airlines such as Flybe.
Balpa general secretary Jim McAuslan, said: "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."
Previous restructuring efforts meant the airline's half-year results today showed it grew UK passenger numbers by 5.6% to 4.3 million, while it returned to profit with a surplus of £13.8 million. The group's UK-based airline activities increased revenues by 1.3% to £328.2 million.
Flybe said it will have "two engines of growth" based around its existing regional scheduled service and a white label model where Flybe will act on behalf of mainstream European airlines.
It said it will rationalise the route network, review the fleet mix, remove surplus capacity and improve aircraft and crew utilisation.
The company said: "The economic environment continues to be challenging, and any airline has risks and uncertainties. But the turnaround of Flybe is gaining momentum and the initial two phases are already delivering significant savings."
Unite national officer Oliver Richardson said the union will scrutinise the company's business plans to protect as many jobs as possible.
He added: "Cabin crew have already been through one major reorganisation at Flybe only recently and they will be angry that once again they are on the front line of more cuts.
"This is clearly a very difficult time and Unite will be doing everything possible to provide support to the workforce."
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