Low-cost airline Flybe to slash 500 jobs but shares soar as profits grow

Exeter-based airline Flybe announced on Monday its intention to cut 500 jobs, despite reporting pre-tax profit of £13.8m. Shares have rocketed this morning, up over thirteen per cent at pixel time. The company, which employs 2,700 staff, has already suffered 490 redundancies in 2012/13 and a further 100 in the first half leaving in 2013/14.

Saad Hammad, chief executive officer, commented:

Cost savings were necessary, but we simply needed to do more and to do it immediately. The business needed action now and so today we are explaining our next phase which encompasses a review of everything we do and how we do it. Most of the immediate actions are completed, being implemented or already being consulted on. Unfortunately there is a proposal for further redundancies. We will consult with the trade unions and employees to ensure that this is done fairly and delivers the right outcome for the business.

The move comes as part of the company's turnaround plan, which it hopes will save it £40m in 2013 and £45m in 2014/15. The airline saw its revenues grow to £351m in the six months to September. Passenger numbers also increased by 5.6 per cent to 4.3m and the group now commands a fleet of 96 aircraft.