A REGIONAL airline which flies out of Southampton airport has issued a profit warning.

Flybe has warned over full-year profits as it battles against rising fuel costs and the impact of a weaker pound.

The carrier said consumer demand in domestic and near-continent markets had weakened in recent weeks and is expected to continue easing into the second half of its year to March 31.

"This together with higher fuel prices and weaker sterling will impact the expected second-half profit performance," it said.

Flybe estimates it will report full-year underlying pre-tax losses of around £12 million - including a hit of around £29 million from the weak pound and fuel costs.

Christine Ourmieres-Widener, chief executive of Flybe, said: "We have made progress in driving our unit revenues across the summer season, but we are now seeing a softening in the market.

"We are reviewing further capacity and cost-saving measures while continuing to focus on delivering our sustainable business improvement plan.
"Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs.

"We continue to strengthen the underlying business and remain confident that our strategy will improve performance."