Flybe puts itself up for sale

Flybe up for sale weeks after profit warning

Flybe up for sale weeks after profit warning

Flybe said the decision to put itself up for sale comes amid a range of options being considered as it battles against challenging conditions in the airline industry.

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, and flies to destinations across the United Kingdom and Europe.

The airline's stock has lost almost two-thirds of its value since the company issued a profit warning last month, underscoring challenges faced by rival European airlines including Ryanair Holdings Plc RYA.I Wizz Air Holdings Plc WIZZ.L and Easyjet Plc EZJ.L .

The group has appointed Evercore to assist it with the review, and said that parties with a potential interest in making a proposal should contact the financial adviser.

Flybe now serves around eight million passengers per year.

Flybe Group is mulling a sale or merger with a rival following a profit warning due to high fuel prices, weak demand and currency concerns.

But in the six months to the end of September, Flybe's pre-tax profits fell 54 per cent to £7.4m, compared with the same period previous year.

Sources within the airline said that at least 3 potential new owners are in talks and are not necessarily existing airline companies.

However, the group's capacity had been reduced by 9% while net debt increased to £82.1mln from £59.1mln at the end of previous year, which the company blamed on "the seasonality of cash and adverse sterling movements".

"There are more of them and we see this as simply the latest domino to fall in the European short-haul airline sector".

Neil Wilson, chief market analyst at Markets.com, said that while the higher fuel costs and weak pound had pushed FlyBe to the current situation, "it has been for some time a zombie airline".

Flybe is now reviewing its business in terms of cash management, cost savings and capacity reduction.

This is already starting to have a positive impact, as shown by the improved first half adjusted profit before tax; however, we must do more in the coming months.

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