Flybe plunges after it warns on its profits

 
Kasmira Jefford
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REGIONAL airline group Flybe yesterday saw its shares plummet by 36 per cent after it slashed guidance for its 2012 profits, due to a slowdown in demand on domestic flights.

In its second profit warning this year, Flybe said revenues in the six months to October were one per cent behind management’s expectations while costs were in line with expectations.

Shares have fallen 70 per cent since Flybe’s flotation on the London Stock Exchange at the end of last year when it raised £60m for European expansion. Flybe’s first profit warning in May sent shares down by a quarter.

The Exeter-based group led by chairman Jim French said it was too early to determine whether the slowdown in September trading was “a short term reaction to the turbulent macro-economic environment” or a longer term market adjustment.

Revenues at Flybe were three per cent higher than last year when taking into account the impact of the 2010 volcanic ash disruption, which cost the company about £12m.

House broker Investec, which cut its full-year estimates from £20m to £6.5m, said it still saw long term value in the Flybe shares.

Industry experts said the news was part of a wider trend. British Airways’ owner International Airlines Group published figures yesterday forecasting a softening of trade and consumer demand in October, while Ryanair’s load factor fell last month.