Flybe announces 100 job losses for Exeter in restructure

Flybe has announced it is to cut 300 jobs, with 100 reported to be under threat at the airline's Exeter HQ, in an effort to return the carrier to profitability in 2013-14.

As a result of the cost reduction plan announced today, the Exeter-based airline has commenced the consultation process that may lead to approximately 300 proposed redundancies. This would equate to roughly 10% of its current UK based employees.

It is expected that the majority of the proposed redundancies will, following consultation, come from Flybe’s Exeter HQ, Manchester and Newcastle.

Commenting on the plan, Flybe’s Chief Executive Jim French said: “Today’s restructuring plan for the airline has clear, two-year profit targets, which we believe are deliverable and realistic. A new, slimline business model for UK scheduled services underpins a turnaround, which I expect will deliver a £3.00 per seat profit target in the medium term. Today’s announcement of a turnaround strategy for the UK business is a clear indication that Flybe has a plan not only to address the challenges we face, but also one to exploit the opportunities available, particularly in Europe.

“It is a matter of great regret that many valued and hard-working colleagues may leave the organisation and it was a decision I and the Board have not taken lightly; it’s one we have tried to avoid and it is the first time in almost 30 years of business that we have had to take such action. However, faced with the brutal impact of a 160% rise in Air Passenger Duty (APD) over the past six years and the consequent 20% decline in domestic traffic over the same period, we have to recalibrate the business.

"There is no escape from the £68M per annum APD tax burden which Flybe has to pay as a result of increases successive governments have levied on the industry. Flybe now pays more than 18% of our ticket revenues to the government in APD, whilst other UK based carriers who operate a greater proportion of their business outside of the UK pay less than 6%."

Concluding, Mr French said: “Recognising that any significant change to either the UK Economy or the redistribution of APD is likely to be some way off, today’s announcement represents a clear and realistic plan with a measurable timescale and benchmarks, based upon significant restructuring and cost reduction to return Flybe to profitability. We are committed and focussed on the delivery of this plan, continuing to provide strong customer service to more than 8 million passengers each year; to provide secure and long term employment for the remainder of our staff and to improve shareholder value.”