Regional airline Flybe has blamed poor UK domestic demand as the major reason for slipping into the red.
The carrier made a pre-tax loss of £1.3 million for the six months to the end of September, compared to a profit of £14.3 million for the same period last year. This was despite Flybe’s group revenue being flat at £340.8 million year-on-year.
Flybe CEO Jim French said that the company would continue to grow its European operations as its UK domestic business faced “continuing challenges”.
"The UK domestic aviation market continues to show little sign of recovery, with the market trending a year-on-year decline,” added French. “Since this represents about 75 per cent of Flybe UK's passenger base, this decline continues to pose challenges on our UK business.”
Flybe UK carried 4 million passengers during the six-month period – down from 4.2 million in the previous year. Load factors also declined from 65.6 per cent in 2011 to 65 per cent this year. Flybe is the current leader in the UK domestic air market with a 29 per cent share.
The airline is cutting its capacity by 1-2 per cent for the upcoming winter season, although it said that forward sales were up by around 2.5 per cent year-on-year.
“We are also working on a range of cost-saving initiatives over the next 12 months, targeting an annual saving of £2 per seat,” said French.
He added that Flybe Finland, a joint venture with Finnair, had “continued its impressive trajectory of growth” through its contract flying for the Finnish carrier.
“I am encouraged by the continuing dialogue that Flybe Europe's management team are having with other parties seeking similar arrangements,” said French.