June 21 (Bloomberg) -- Flybe Group Plc, Europe’s largest independent regional airline, raised its targets for cost reductions this year and next after its loss in the 12 months through March more than tripled.
The company plans to save 40 million pounds ($62 million) in the current fiscal year and 50 million pounds in fiscal 2015, up from an earlier target of 25 million pounds, the Exeter, England-based airline said today in a statement. The shares gained as much as 9.7 percent, the most in more than a month, and were up 7.9 percent at 44.5 pence by 9:02 a.m. in London.
Flybe has started a turnaround plan to cut costs and improve its balance sheet amid reduced demand and high fuel prices. It sold takeoff and landing slots at London’s Gatwick airport to Europe’s second-largest discount carrier Easyjet Plc for 20 million pounds and is delaying an order for new planes from Brazilian manufacturer Embraer SA. The airline has also renegotiated pay terms with pilots to improve its financial position.
“We have streamlined the business, reducing U.K.-based headcount by more than 20 percent,” Jim French, Flybe’s chairman and chief executive, said in the statement. The carrier is making “major progress” in its recovery plan after “disappointing” earnings, he said.
Flybe made an adjusted pretax loss of 23.2 million pounds for the 12 months through March, compared with a 7.1 million pound loss a year earlier, the company said. Full-year sales rose 15 percent to 782 million pounds.
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