Flybe issued a full-year profit warning in a trading update ahead of its results for the first six months of 2018 revising its full-year guidance to a pre-tax loss of £12 million.
The carrier that said higher fuel prices and the weaker value of the pound, combined with falling customer demand. It has taken a hit of £29 million from t from weak sterling and a rise in fuel prices.
Flybe said the board’s calculations included a forecasted £29 million of year-on-year impact from weaker sterling, fuel and carbon prices, but the figure is still less than in 2017, when it posted losses of £19.2 million although it is due to a £10 million windfall from ending an onerous lease.
Chief executive, Christine Ourmieres-Widener said: “We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market.
“We are reviewing further capacity and cost saving measures while continuing to focus on delivering our Sustainable Business Improvement Plan.
“Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs.
“We continue to strengthen the underlying business and remain confident that our strategy will improve performance.”
Flybe’s strategy has been to reduce capacity to focus on its most popular routes which has delivered both higher load factors and revenue per seat. In Q2 the load factor was up year-on-year by 7.2 percentage points to 86.6 per cent. Passenger revenue per seat was up 6.8 per cent as capacity reduced by 10 per cent.
Flybe is reviewing further capacity and cost saving measures as it looks ahead to the rest of the year, in addition to its current strategy of reducing capacity by focusing on its most popular routes.
The UK airline operates a fleet of 78 aircraft, two less than in March this year, on 210 routes across 15 countries. Last year, it carried more than 8.5 million passengers.