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Flybe issues profit warning as bookings fall

Flybe issues profit warning as bookings fall

A “significant” fall in bookings during September has forced newly floated Flybe to issue its second profit warning in five months.

The regional carrier – which was launched on the London Stock Exchange in December 2010 – confirmed its UK domestic network was hardest hit by the slowdown.

As a consequence, the group’s total revenues for the first half of the 2011/12 financial year were presently circa one per cent behind expectations, with costs in line with expectations.

Flybe flew a total of 6.4 million passengers during the first half, an increase of 200,000 on the same period of last year.

However, this figure is beneficially distorted by the disruption caused by the Icelandic ash cloud of 2010.

Flybe said it was too early to determine whether the September slow down in sales on UK domestic routes is a short-term reaction to the turbulent macro-economic environment, or whether this is a longer term market adjustment away from air travel.

Flybe chairman Jim French explained: “The recent slow down in sales on our UK domestic routes is obviously a development we are closely monitoring.

“In previous years, Flybe has demonstrated the resilience of its high frequency business model by adjusting short term capacity to meet reduced demand and being prepared to cut costs. 

“Our management team remains acutely focussed on these areas.”

Investors remained concerned about the future of the airline, with shares down as much as 36 per cent to 65p.

This is well below the flotation price of 295 pence last December leaving investors facing huge losses.