A pre-tax loss of £40.7 million was reported this morning by Flybe against £6.2 million in 2011/12.
The struggling regional airline said cost savings of £25 million in the first phase of a turnaround plan had been exceeded as it cut UK staff numbers by more than 20% and pilots agreed a 5% pay cut
A further £30 million of savings are being targeted for the current financial year
The airline is selling its Gatwick take off and landing slots to easyJet for £20 million and has deferred delivery of 16 Embraer E175 regional jets.
Flybe said it welcomed “growing political momentum” to devolve Air Passenger Duty policy to the UK regions, as well as growing pressure to create a more coherent regional aviation policy for the UK as a whole.
“Flybe and its customers would be significant beneficiaries of both of these developments,” the airline said.
Chairman and chief executive Jim French said: “Flybe has exceeded its target of taking out £25 million from its cost base during 2013/14 and will deliver around £40 million in savings in this current financial year, expected to rise to £50 million annualised savings from 2014/15 onwards.
“In the last few months we have streamlined the business, reducing UK-based headcount by more than 20%. We have also made major progress in reducing the cost of our supplier base.”
He claimed that its decision to exit Gatwick “acted as a clarion call for action and debate on the injustice of the grossly unfair ‘double hit’ nature of the APD tax on the UK regions”.
French said: “The plans being developed in Edinburgh, Cardiff and Belfast are aimed at reducing this burden, and bode well for our customers, the regional economies we serve and Flybe itself. We will support these developments and work closely with those seeking to bring about change.
“Our results for 2012/13, while expected, are nonetheless disappointing. During the year, we have taken difficult decisions as part of our turnaround plan, which have affected all our people. Challenging as they have been, these decisions were critical to ensuring the future success of Flybe.
“We expect to see considerable reductions in the cost base of the business in both this year and the next, thanks to the actions taken during the course of 2013 that are targeted to be complete later this year. The group is now more strongly placed for the future.”