Aviation turbulence prompts UK's Flybe to put itself up for sale
Struggling UK regional carrier Flybe is in a race to find a buyer as it faces into the lean winter months.
The airline said it's already in talks with some potential suitors and will also eye further cost-cutting measures as its losses mount.
The airline was in talks earlier this year about a proposed deal that would have seen the parent firm of Aer Lingus Regional operator, Stobart, buy Flybe.
Those talks did not result in an offer for Flybe and the airline has been operating in an increasingly competitive environment characterised by fare wars, high fuel prices and consolidation. Brexit uncertainty has also shaken smaller operators.
Flybe, whose chief executive is former CityJet boss Christine Ourmieres-Widener, said it is now undertaking a comprehensive review of the various strategic options open to it to address the challenges facing the airline industry and "maximise value for shareholders".
Flybe's shares have plunged 77pc in the past 12 months.
The airline has hired Evercore to undertake its review and explore options.
"These options include further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources, as well as a potential sale of the company," added the airline.
It's in talks with "a number of strategic operators" about a potential sale.
Flybe has a fleet of 78 aircraft, with 51 that are held on operating leases, and 27 that are owned by the company.
The British Airline Pilots' Association (Balpa) said that Flybe was a "fundamentally sound airline" and said it expects to be consulted by Flybe and potential bidders over any future plans for the carrier.
However, Flybe has been hit by significant turbulence.
Last month, it warned that it will make a £12m (€13.7m) loss this year as it takes a £29m (€33.2m) hit from higher fuel costs and currency impacts. The projected loss includes an estimated £29m of adverse year-on-year impact from weaker sterling, fuel and carbon prices.
"Consumer demand in domestic and near-continent markets has weakened in recent weeks and the board now expects this to continue into the second half," the airline said.
It cut its seat capacity by 9pc during the first half of its financial year, which ended in September, when it generated revenue of £409m and a pre-tax profit of £7.4m.
That compared to a £16.1m pre-tax profit in the six months to the end of September 2017. The most recent profit figure reflected a £6.6m non-cash revaluation loss on US dollar-denominated aircraft loans.
There was a £15.2m net cash outflow from its operating activities during the first half of its financial year. Its total net decrease in cash and equivalents in the period was £32.5m (€37.2m).
That came during what would have been its busiest time of year. That left it with cash and cash equivalents of £54.2m (€62.1m) at the end of September, and £16.4m in restricted cash.
In its 2018 financial year, it suffered a £28.4m decline in its cash and equivalents position.