Airline up for sale following profit warning

Flybe has put itself up for sale just weeks after issuing a profit warning.

The airline said this morning it was undertaking a comprehensive review of various options to address the “current challenges facing the airline industry”, one of which was a potential sale of the business.

Flybe is the largest airline in terms of passenger volumes at Birmingham Airport, with more than 20 winter routes from Aberdeen to Stuttgart.

Last month, the airline warned full-year losses would be £22m, blaming falling consumer demand, a weaker pound and higher fuel costs.

Latest results published this morning on its performance for the half year to the end of September revealed a 54% drop in pre-tax profit to £7.4m, while revenues fell 2.4% to £409.2m.

Flybe said other options open to it included “further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources”.

Chief executive Christine Ourmières-Widener said: “In line with our strategy, we reduced seat capacity in the first half by 9.0% delivering a 7.2% increase in revenue per seat.

“Continued improvements are being seen into quarter three which demonstrates the popularity of Flybe for our customers. However 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. This is already starting to have a positive impact, as shown by the improved first half adjusted profit before tax; however, we must do more in the coming months. We remain confident in the vital role that Flybe plays in UK connectivity.”

Stobart Group, which pulled out of a bid to buy Flybe earlier this year after the airline rejected its offer, could be a possible purchaser, according to Sky News.