FLYBE SHARES DIVE ON LOSS FEARS

NERVOUS investors have wiped more than £25m off budget airline Flybe after it issued a profit warning.

Shares plunged almost 40pc as the company blamed higher fuel costs, weakening demand and a lower pound for major problems.

It now expects a pre-tax loss of around £22m in the year to March 2019 – far higher than the previously estimated loss of £3.5m. It made a loss of £19.2m last year.

Flybe, which has a 78-strong fleet of planes, said fewer customers had been using its domestic UK and European routes in the last few weeks.

It is expected to unveil more plans to slash costs when it releases half-year results next month, and is already aiming to trim its fleet to around 70 aircraft by early 2020, down from a peak of 85 in May last year.

Chief executive Christine Ourmieres-Widener said: ‘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.’

Fuel prices have been pushed up as oil prices linger at a four-year high of around $80 a barrel.

Analysts at Liberum cut their target price on Flybe shares to 33p from 43p. Its stock has already halved in value over the last three months.

Michael Hewson, chief market analyst at trading firm CMC Markets, said: ‘Despite Flybe focusing on its more profitable routes, the turnaround doesn’t appear to be happening fast enough.’

Exeter-headquartered Flybe also said its flights were 86.6pc full over the summer, a record high. Shares closed down 41.4pc, or 13.32p, at 18.88p.