An outlook warning from Flybe (FLYB) sends investors into a panic with shares in the airline falling 6.5% to 39.2p. The regional carrier says consumer uncertainty and the economic impact from Brexit, as well as terrorist incidents, could materially impact its business.

Flybe also says that demand may weaken further if consumer and business confidence suffers, particularly if a weaker pound continues.

ETX Capital says Brexit has hit airlines harder compared to other sectors as a result of investors’ fear that people will reign in their holiday spending.

It believes that European terror attacks are affecting demand, particularly for France. This has relevance to Flybe as it flies to locations such as Paris and Rennes.

The airline has achieved a 15.5% increase in seat capacity to 3.2 million seats, despite repeated industrial unrest in France, which accounts for 12% of Flybe’s seat capacity.

The UK cost per seat slipped from £53.24 to £51.52, including fuel.

However, Flybe’s passenger numbers grew by 9.2% to 2.3 million, while passenger revenue improved by 5% to £155.8 million, despite a slow start in April.

Chief executive Saad Hammad comments: ‘We are yet to see the full impact on demand of the devaluation of sterling and the heightened consumer uncertainty after the Brexit vote.

‘It is also too early to assess the potential demand impact of recent terrorist attacks.’

Issue Date: 27 Jul 2016