Flybe shares slump 20% on revenue warning due to declining demand

Flybe has warned that weak UK sales are causing it problems. Sales in the three months to December 2011 were down 8% on a year earlier. Flybe said conditions in the UK domestic air travel market had continued to deteriorate and this trend would continue. There has been a general decline in demand for air travel during the economic downturn. Flybe said these conditions “will force” rationalisation of the European short-haul airline market. Shares in the airline have fallen more than 80% since the start of 2011. UK sales make up about 70% of Flybe’s revenue, but the airline is looking to expand into Europe.