Slump in leisure travel hits regional airline

Regional airline Flybe has warned demand for leisure travel has slumped as the consumer spending squeeze hits the industry.

The carrier, which operates flights from Doncaster and Leeds Bradford said while business travel, which makes up 45 per cent of its passengers, was resilient, the number of passengers flying on holiday or to visit friends and family decreased in February and March.

The airline, which joined the stock market in December, added it was adding a £3 fuel surcharge per passenger to combat soaring fuel costs and was considering selling off aircraft.

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Flybe, which also flies from airports including Birmingham, Bristol, Cardiff, Edinburgh and East Midlands, saw shares dive nearly 20 per cent following the update, despite confirming its full-year profit expectations of £22m.

Flybe is the first carrier to warn that the clamp on spending – most notably felt by the retail sector in recent months – is starting to hit the airline industry.

Consumer spending power suffered its first fall in 30 years in the final quarter of 2010, as wages failed to keep up with inflation.