Flybe sinks on profit warning from weaker demand, rising fuel

Flybe issued a profit warning Wednesday citing weakening demand, higher fuel costs and a weaker British pound, sending shares in the British regional airline lower. Shares in Flybe, whose routes include London to Cornwall as well as connections between smaller UK cities and French regional cities, slumped 38% to 19.8p at 0917 GMT Wednesday. Flybe, which has in recent years tried to reduce its fleet size and cut costs, forecast a pretax loss of around GBP22m for the current 12 month period, substantially worse than a current company-supplied consensus for a loss of GBP3.5m. However, a GBP10m pound benefit from the ending of an onerous lease will help cushion the blow, putting the 78-aircraft strong company on track to post a loss of GBP12m over its financial year which runs to March 31 2019. Flybe said that in recent weeks, consumer demand for travel in Britain and Europe had weakened, and that would combine with higher fuel prices and weaker sterling to drag on its performance in the second half period. The winter season is always tougher for airlines as fewer Europeans take flights to go on holiday, and that comes at a time when the oil price is hovering at a near four-year high. Flybe will announce half-year results on Nov. 14th, when it is expected to detail further cost cutting plans.<br/>