Flybe pre-tax losses have deteriorated to £6.2 million from £4.3 million in 2010-11.
The regional airline group described the results to the end of March as being in line with expectations.
Flybe said the performance, while disappointing, reflected a resilient business able to weather the combined impact of a 5% underlying decline in its core UK market during the year along with high fuel prices and other inflationary pressures.
The results reflect “significant investment” as part of the implementation of a long term growth strategy. First year losses at Flybe Europe came in at £3.7 million and £1.2 million due to new training academy building in Exeter.
Without these investments, the loss before tax would have been £1.3 million, or approximately 0.2% of turnover, the company said.
The business was restructured into three operating divisions: Flybe UK, Flybe Europe and Flybe Aviation Support in the year.
Flybe UK recorded revenue of £588.1 million and a pre-tax loss of £2.2 million against a profit of £5.7 million in the previous year.
Chairman and chief executive Jim French said: “Flybe is Europe’s largest independent regional airline, flying over 200 routes from more than 100 airports across 18 countries. It has a robust business model and a clear growth strategy.
“Through a continuing focus on managing costs and capacity we are mitigating the impact of the economic downturn in the UK.
“We are pleased with the progress we have made with Flybe Finland, underpinning our European expansion plans and the replication of our UK operations.
“Meanwhile, our fleet substitution programme, along with a de-risking of the business through a significant increase in contract flying, will have a far reaching beneficial impact on the business and one that will benefit the group for many years to come.”
He added: “We will continue to invest in the group’s future ensuring that we maintain our market leading regional position in the UK and, at the same time, seeking to build a similar position across Europe.
“We remain in a challenging environment. However, Flybe today is a business of real scale and substance, and one which has again demonstrated its resilience.
“Flybe is well placed to take advantage of any improvement in the UK macro environment and has a strong platform in Europe to leverage, leaving the group strongly placed for the future.”