Flybe, a UK-based airline company, will be cutting jobs as the company struggles to improve its financial position.
As a part of the financial restructuring plan, the airline intends to reduce its workforce by around 10 percent in the UK, which will result in job cuts for around 300 employees. The majority of the redundancies will be at the airline’s hubs in Exeter, Manchester and Newcastle.
The airline 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, slim line business model for UK scheduled services underpins a turnaround, which I expect will deliver a GBP3.00 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 percent rise in Air Passenger Duty (APD) over the past six years and the consequent 20 percent decline in domestic traffic over the same period, we have to recalibrate the business.
There is no escape from the GBP68M 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 percent 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 percent.’
With the revised workforce, the airline intends to implement a modified strategy focusing on its scheduled services business in the UK, and the European contract flying market.