Flybe's annual results descend

European airline Flybe said on Friday it expects to report an annual loss at the lower end of its previous guidance as fuel costs increased during the year.

European airline Flybe said on Friday it expects to report an annual loss at the lower end of its previous guidance as fuel costs increased during the year.

In a trading update for the year ended March 31st 2013, the regional carrier predicted a 2.5% rise in costs including fuel.

The company said revenue would be in line with the previous year, at the lower end of its previous forecast.

Flybe reported in January that it forecast year-on-year revenue growth of up to 2.0% and recorded total revenue of £615.3m in 2012.

Forward ticket sales revenue for Flybe UK for the 2013 summer flying programme show a 2.0% increase, driven by growth in passenger numbers.

The group has been working to reduce its costs since announced its Deliver and Future Direction plan in January.

"Phase 1 of the cost reduction plan is progressing well and is expected to deliver cost savings ahead of the £25m already communicated for the year to March 2014," the airline said.

As part of the restructuring the group's divisions have been scaled back to two - Flybe UK and Flybe Outsourcing Solutions.

Non-underlying restructuring costs for the first phase of the plan are expected to be in line with previous guidance of between £10m to £12m.

Flybe is advancing the second phase of the programme to gain further revenue and cost benefits this year.

Shares fell 2.38% to 41p at 10:02 Friday.

RD

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