Flybe, Europe’s largest regional airline, on Friday cut its full year revenue target due to the impact of continued weak consumer markets and stubbornly high oil prices.
“Although forward booking visibility remains extremely limited, the continuing challenges in the UK and Eurozone economies, together with distortions from the Jubilee and Olympics, mean that group revenue trends for the year to March 31, 2013 currently point to year-on-year growth of between flat and 2 percent, which is below our previous expectations,” the company said.
Flybe said revenues rose 1.6 percent to GBP£163 million (USD$254.84 million) in the period from the start of April to August 9.
It said UK to Europe leisure routes performed well in the three months to the end of June but that the business market had shown signs of weakness.
European airlines are being hit by slower spending on air travel amid the euro zone debt crisis as well as by high fuel prices, and many have responded by closing unprofitable routes and limiting their spending.
“We remain cautious over the outlook and do not expect a material recovery in either consumer or business confidence in the short term,” the company added.
The British carrier said it was targeting further cost saving initiatives through a range of measures, including capacity management and supplier cost reduction.
It added that the impact of these initiatives mean that its costs including fuel, will likely increase by around 2.5 percent.
Flybe and Finnair last year bought Finland’s biggest domestic carrier Finnish Commuter Airlines (FCA) for USD$35 million to expand in the Baltic market.