Short-haul airline plans job cuts as part of a restructuring plan after slump in demand for business travel
The short-haul airline Flybe is to cut about 300 jobs, a tenth of its UK workforce, as the troubled group plots a path back to profit.
Flybe said a fifth of managers would go, along with one in 10 “overhead and production” staff.
The group is also considering outsourcing some support activities in addition to the redundancies, having already outsourced its call centre last month with the loss of 55 jobs. More than 100 jobs in catering, ground services and line maintenance could be transferred out of the company.
The majority of the planned redundancies are expected to come from the company’s headquarters in Exeter, where up to 95 jobs could go, and from its Manchester and Newcastle bases.
The cuts are part of a restructuring plan that aims to save £35m by 2014-15, costing £10m to £12m in the process.
A later phase of the restructuring will focus on “revenue enhancements and ongoing business efficiencies”.
The company said it had no plans “at this stage” to close any of its 13 UK bases or make any changes to its route network.
Flybe aims to return to profit by the 2013-14 financial year. It has set itself the target of making a profit of £3 a seat after overheads in three to five years.
Flybe has struggled since its flotation in December 2010 as demand for business travel within the UK has slumped, and it has issued a series of profit warnings.
In an effort to reduce its reliance on the UK it has been looking to European markets and recently embarked on a joint venture with Finland’s Finnair.
The chief executive, Jim French, blamed the job cuts on the “brutal” impact of paying £68m a year in air passenger duty, which hits the UK-focused Flybe harder than other operators, and a 20% decline in domestic traffic over the past six years.
Flybe will also simplify the structure of the business, by combining its contract flying business Flybe Europe with the maintenance, repair and training unit Flybe Aviation Support into a new division called Flybe Outsourcing Solutions.
Flybe UK is to sell four aircraft and will no longer buy new planes in 2013-14.
The company also plans to slim down the group and operating boards.
In a separate trading update, the company said Flybe UK’s forward passenger sales revenue was up 2% in the fourth quarter of the current financial year and up 5% for the summer.