Airline Flybe puts itself up for sale after profit warning

Under-pressure regional airline Flybe is in talks about a possible sale of the group weeks after warning over profits.
Flybe. Picture: Flybe/PA WireFlybe. Picture: Flybe/PA Wire
Flybe. Picture: Flybe/PA Wire

The Exeter-based 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 and has hired Evercore as adviser to help with the review and sale process.

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It comes weeks after Flybe warned over profits following falling demand and 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.

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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.

In half-year results also announced on Wednesday, 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.

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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.

But she added: '˜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.'Â