THE man in charge of Flybe has admitted this morning that the struggling regional airline business must “shrink to grow” after outlining plans to axe 500 jobs.

Loss-making flight services will be axed along with the jobs as part of cost cutting measures, according to chief executive Saad Hammad, below left, who says the measures are needed to keep the firm viable.

Daily Echo: Saah Hammad with Jim French

Mr Hammad said: ''We are going to shrink to grow. Without these proposed cuts we cannot be viable.''

He said the job losses would be ''almost exclusively in the UK'' but he could not yet give details of which roles would go.

Asked about which routes would be axed, he said the group was looking to cut out the loss-making services.

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Mr Hammad said: ''Our vision is one of growth. We need to cut costs and make efficiency improvements. Our original concept of regional connectivity was a sound one but we have executed that very, very badly in recent years. We want to execute it very well.''

The firm has also vowed to improve aircraft and crew utilisation as part of the cost cutting proposals.

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The measures are expected to save the airline £26 million a year from next year, on top of previous initiatives to save £40 million this year and £45 million in 2014/15.

The company said: ''This will require tough decisions to be taken over the coming months and, regrettably, this proposal may result in the loss of around 500 jobs spread across the business.''

Consultation with trade union and staff association representatives on the proposals will start shortly.

Daily Echo:

Flybe currently employs around 2,700 people, with some 650 staff having left the business since last January.

The British Airline Pilots' Association (Balpa) said it was shocked by the announcement and called on the Government to play its part by reducing the impact of Air Passenger Duty.

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Balpa general secretary Jim McAuslan, said: ''This is a distressing day for the dedicated pilots who loyally serve Flybe and its passengers day in, day out and we will be supporting them throughout this difficult redundancy process.

Daily Echo: A Flybe dash 8.

''Pilots are working with Flybe to secure the future of the airline, which is vital to connecting the country and driving growth and prosperity outside of London.''

The airline's half-year results today showed it grew passenger numbers by 5.6% to 4.3 million, while it returned to profit with a surplus of £13.8 million.

Having joined Flybe in August, Mr Hammad said: ''It was clear to me that the existing phase one and two cost savings were necessary, but we simply needed to do more and to do it immediately.

''The business needed action now and so today we are explaining our next phase which encompasses a review of everything we do and how we do it.''

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Mr Hammad's regime has already seen the departure of a raft of top executives.

After entering its recent period of turbulence, Flybe has focused on shoring up its core regional bases in Southampton, Manchester, Birmingham and the Channel Islands, selling its Gatwick Airport runway slots to easyJet for £20 million.

Flybe currently employs around 2,700 people, with some 650 staff having left the business since last January.

Daily Echo: Southampton International Airport

Unite union national officer Oliver Richardson said: ''Cabin crew have already been through one major reorganisation at Flybe only recently and they will be angry that once again they are on the front line of more cuts.

''This is clearly a very difficult time and Unite will be doing everything possible to provide support to the workforce.

''Over the coming weeks the union will scrutinise every inch of the company's business plans in order to protect as many jobs as possible and to avoid compulsory redundancies.

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''The company has been open with the union about its plans and we hope to use this relationship in order to mitigate the impact of this decision.''