Flybe cautious as slowdown emerges in sales

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UK regional carrier Flybe's first-half revenues for 2011-12 are running about 1% down on expectations, although costs are in line with forecasts.

The slip follows a "significant slowdown" in sales across the UK domestic network last month, the airline said in a trading update ahead of disclosing its first-half results to 30 September.

Flybe cautions: "It is too early to determine whether the September slowdown in sales on our UK domestic routes is a short term reaction to the turbulent macro-economic environment, or whether this is a longer term market adjustment."

Forward ticket sales revenue for the second half, including the winter period, are up 1% on the carrier's largely flat capacity - below previous expectations.

But it nevertheless said that its first-half performance had been "strong", with revenues up 3% when excluding the impact of the 2010 Icelandic volcano crisis.

"UK regions to European business city routes performed particularly well," it added.

Flybe's decision to rein in capacity - the carrier has been disposing of Bombardier Q400 aircraft - meant it logged a 1.7% fall in underlying seats flown for the six-month period.

But it said its strategy had generated improvements in passenger numbers, load factor and both ticket and ancillary yields, and brought a 6% increase in revenue per seat.