Economy

Flybe puts itself up for sale amid tough airline conditions

Flybe puts itself up for sale amid tough airline conditions

Flybe, whose roots date back to 1979, has 78 planes operating from smaller airports such as London City, Southampton and Norwich to destinations in the United Kingdom and Europe.

The Exeter-based airline - which flies routes from the Island including Liverpool, Manchester and Birmingham - said last month that it expected to lose twelve million pounds this year.

The group has hired Evercore as adviser to help with the review and sales process.

Julie Palmer, partner at licenced insolvency practice Begbies Traynor, said it was "unsurprising" that Flybe is looking for a buyer: "As Flybe's year took a nosedive following its trading update last month, it is unsurprising the budget airliner is looking for new investors".

It serves around eight million passengers a year, but has been struggling to recover from a costly IT overhaul and has been trying to reduce costs.

It comes just weeks after Flybe warned over profits following easing demand and a £29 million hit from rising fuel costs and the weak pound.

Half-year revenue fell to £409.2m from £419.2m.

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However, the group's capacity had been reduced by 9% while net debt increased to £82.1mln from £59.1mln at the end of past year, which the company blamed on "the seasonality of cash and adverse sterling movements".

The airline's shares have fallen by nearly 75% since September.

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".

Christine Ourmières-Widener, chief executive of Flybe, said: "Continued improvements are being seen into quarter three which demonstrates the popularity of Flybe for our customers".

Flybe is now reviewing its business in terms of cash management, cost savings and capacity reduction.

Flybe said it was also exploring a possible move to an LSE standard listing, from its current premium listing, saying it would provide the company more flexibility on divestments.


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