FLYBE yesterday revealed it made a loss in the past year — blaming cheaper train travel.
Shares in the budget airline, Britain’s biggest domestic carrier, nosedived 12 per cent in early trading after warning of “sharpened price activity from rail operators”.
The company said it had also been hit by other woes, including flights having to be cancelled because of poor weather.
Strikes by air traffic controllers in France also had an impact.
The shares later rallied, ending the day down 0.5p at 42.50p — a drop of 1.16 per cent.
Flybe’s profit warning came as STAGECOACH jubilantly revealed sales were up in its rail division.
At the same time the airline had been splurging on a costly IT revamp.
New boss Christine Ourmieres-Widener said the upgrade was vital because four in five bookings were now being made online.
The bill will be between £5million and £10million.
But even without that the airline was on course to make a slight loss.
Growth plans have been scaled back, with just ten per cent more passenger capacity added in the first three months of this year.
The previous three months had seen it add 12.7 per cent more seats.
Experts say the airline industry faces Brexit uncertainty.
RYANAIR yesterday warned an extreme scenario could see no flights to and from Europe when the UK quits the EU in 2019.
That is clearly an exaggeration but Julie Palmer, of insolvency specialists BEGBIES TRAYNOR, said Flybe was “in for some serious turbulence ahead”.
She said: “On the day Article 50 has been triggered, it’s little surprise cautious investors reacted so strongly to Flybe’s surprise profit warning.”