Shares in budget airline Flybe plummeted this morning, after the UK company issued a full-year profit warning in a trading update ahead of its results for the first six months of 2018.
Flybe's share price plunged a staggering 37.8 per cent as markets opened this morning, wiping over £20m off its market capitalisation.
The airline said higher fuel prices and the weaker value of sterling, combined with ailing customer demand, had pushed its board into revising its full-year guidance to a pre-tax loss of £12m. This is higher than was widely expected, even with the benefit of a £10m onerous lease provision release having been taken into account.
The board's calculations included an estimated £29m of year-on-year impact from weaker sterling, fuel and carbon prices. In 2017, Flybe recorded losses of £19.2m.
"We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market," said Flybe chief executive Christine Ourmieres-Widener.
"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 said it 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.
This strategy has so far produced some mixed results, increasing passenger revenue per seat by an estimated eight per cent while total yield was down two per cent.