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Flybe (LON:FLYB) witnessed its share price soar 28% on Wednesday morning, after it announced that it put itself up for sale following a dismal set of financial results that saw its pre-tax profit fall by 54% to £7.4 million in the six months to September.
The regional airline carrier has mandated investment bank Evercore to undertake a ‘comprehensive review of various strategic options’, with the company feeling the impact of a weaker pound, rising fuel costs that have forced it to cut back on its fleet of aircraft and hurt its bottom line.
‘There has been a recent softening in growth in the short haul market, as well as continued headwinds from higher fuel and currency costs,’ Flybe CEO Christine Ourmières-Widener said. ‘We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings.’
‘In line with our strategy, we reduced seat capacity in the first half by 9.0% delivering a 7.2% increase in revenue per seat,’ she said.
‘We remain confident in the vital role that Flybe plays in UK connectivity,’ she added.
Profit warnings sees Flybe share price stutter
In October, Flybe saw its share price nosedive after it issued a full year profit warning, with the company attempting to offset losses by announcing plans to reduce the size of its fleet and improve operational efficiency.
The airliner’s planned fleet reduction programme aims to match aircraft based on route demand, with plans to reduce its fleet size to 70 aircraft, the company said.
Flybe’s fleet size currently stands at 78 aircraft, after it returned two aircraft that had come to the end of their lease terms earlier in the year.
The company plans to offload two additional aircraft from its fleet before the end of the year.
Brexit remains a major uncertainty for the aviation industry, with Flybe likely to incur losses in the event of a no-deal Brexit, the company said.
As such, Flybe’s management is developing contingency plans including potentially reassigning contracts that could be directly affected.