Flybe remains optimistic that it can take advantage of further consolidation in Europe's regional airline industry despite slumping to a pre-tax loss of £6.2 million ($9.64 million) for the year to 31 March, down 44.2% on a loss of £4.3 million the previous year.
Revenue grew 14% to £678.8 million, up from £595.5 million a year earlier, and the carrier's operating loss ballooned to £4.9 million from £0.9 million in the previous period.
Nonetheless, the airline points to its growing European operation - created on 1 July 2011 through the acquisition of Scandinavian carrier Finnish Commuter Airlines in a joint venture with Finnair - as offering a route for future growth.
The division began trading in August 2011 and generated revenue to March 2012 of £63.5 million, with Flybe's share of a first-year loss at £3 million. New bases at Stockholm Bromma and Helsinki were added during the period and from 28 October this year it will begin flying 12 Embraer E-190s on behalf of Finnair on European short-haul routes.
It says: "The board believes that there will continue to be consolidation in the European regional aviation industry which will present further opportunities for Flybe. These will be evaluated on a selective basis with a view to further expanding Flybe's growing presence in Europe."
Revenue at its UK operation grew slightly from £588.1 million, up from £571.5 million last year, with the segment delivering a loss of £2.2 million, against a profit of £5.7 million in the same period a year earlier. Its share of the domestic passenger market now stands at 28%, it says.
The "demise" of low-cost rival BMIbaby has presented it with "opportunities" it says allowing it to launch new routes from East Midlands airport.
Its Flybe Aviation Support business - which includes both MRO operations and its flagship Training Academy - made a pre-tax loss of £0.3 million, against £1.5 million last year, on revenue which rose to £47.3 million from £39.7 million in the previous period. Although the Training Academy delivered a first-year loss of £1.2 million on revenue of £3 million, the carrier says it has "brought self-sufficiency to the UK operation for training pilots, cabin crew and engineers for the first time" and it remains confident for its "long-term prospects". A second simulator was inaugurated at the site in March, it adds.
Since November 2011, Flybe added its first six 88-seat Embraer E-175s, part of a 2010 order for 35 of the type, replacing a number of Bombardier Q400 turboprops which were either sold or returned to lessors.
As it proceeds with this fleet "rebalancing" the carrier estimates that by 2015/16 "over half of Flybe UK's fleet will be E-series regional jets".
Four further E-175s are scheduled for delivery this year, and leases on two Q400s expire, it says.