Flybe axes another 500 jobs in bid to cut costs

The cuts come on top of previous initiatives to save £40m this year and £45m in 2014/15 and the 650 jobs that have been axed since January.

Flybe said the latest job losses would be “almost exclusively in the UK”, but new chief executive Saad Hammad said he could not yet give details of which roles will go.

“There will be job losses and efficiencies across the board,” said Mr Hammad.

“It starts at the top. We’re not focusing on frontline staff. There will be shared pain across the workforce, not just the operational bases.

“We want to remove as much cost and complexity so we can serve the regions. We have a strong core of routes we want to retain. We have a significant number of routes that are unprofitable and we can’t retain.”

Mr Hammad said that without this latest restructuring the airline, which employs 2,700 people, cannot be viable.

The former easyJet chief commercial officer, who joined the company in August, said: “We need to cut costs and make efficiency improvements. Our original concept of regional connectivity was a sound one but we have executed that very, very badly in recent years. We want to execute it very well.”

He said the original concept of connecting the regions to other airports is a sound one.

“Unfortunately, we strayed from that market. We built up an excessive cost base,” he said. “We have deployed too many aircraft and we have a surplus of aircraft. There are too many frequencies on a number of routes. Too many flights are unprofitable.”

He said he couldn’t say which routes are profitable and which are not.

The airline declined to say which routes would be axed and refused to say how Leeds Bradford and Doncaster are performing.

However, it said its key UK bases with the most flights are Southampton, Birmingham, Manchester and Belfast.

Flybe doesn’t employ any staff at Leeds Bradford or Doncaster.

Mr Hammad took over the top job from Jim French who ran the company for 12 years from 2001 and oversaw a major expansion and stock market float.

Flybe has focused on shoring up its core regional bases and sold its Gatwick Airport runway slots to easyJet.

Mr Hammad said: “We are going to shrink to grow. Without these proposed cuts we cannot be viable.”

Consultation with trade union and staff association representatives on the proposals will start shortly.

The first wave of departures will be completed by the end of January and the second wave by the end of March.

Unite national officer Oliver Richardson said the union will scrutinise the company’s business plans to protect as many jobs as possible.

“Cabin crew have already been through one major reorganisation at Flybe only recently and they will be angry that once again they are on the front line of more cuts,” said Mr Richardson.

“This is clearly a very difficult time and Unite will be doing everything possible to provide support to the workforce.

“Over the coming weeks the union will scrutinise every inch of the company’s business plans in order to protect as many jobs as possible and to avoid compulsory redundancies.”

Mr Hammad said it was too early to say if the redundancies will be voluntary or compulsory.

Asked whether he was confident the redundancies will be enough to put the airline on a strong enough footing, Mr Hammad said: “I really hope so.”

The British Airline Pilots’ Association (Balpa) said it was shocked by the announcement and called on the Government to play its part by reducing the impact of Air Passenger Duty on airlines such as Flybe.

Balpa general secretary Jim McAuslan, said: “This is a distressing day for the dedicated pilots who loyally serve Flybe and its passengers day in, day out and we will be supporting them throughout this difficult redundancy process. Pilots are working with Flybe to secure the future of the airline, which is vital to connecting the country and driving growth and prosperity outside of London.”

Mr Hammad said: “I think Air Passenger Duty is particularly punitive for a regional airline like ourselves.

“I will continue to lobby the Government to abolish the duty. Air Passenger Duty is hurting the regions and it needs to be reformed.”

Flybe also announced half year results for the six months to September 30 yesterday.

Following previous restructuring efforts, Flybe grew UK passenger numbers by 5.6 per cent to 4.3 million.

It also returned to profit with a surplus of £13.8m.

The group’s UK-based airline activities increased revenues by 1.3 per cent to £328.2m.

Flybe said it will have “two engines of growth” based around its existing regional scheduled service and a white label model where Flybe will act on behalf of mainstream European airlines.

It said it will rationalise the route network, review the fleet mix, remove surplus capacity and improve aircraft and crew utilisa-tion.

The company said the economic environment continues to be challenging and any airline has risks and uncertainties, but the firm’s turnaround is gaining momentum and the initial two phases are already delivering significant savings.