Flybe mulls sale of Gatwick slots


Struggling regional airline Flybe is in talks to raise vital funds by selling runway slots at London Gatwick airport in a move which could hand a further boost to budget carrier easyJet.

The potential sell-off sent Exeter-based Flybe's shares soaring more than 20% on hopes of a much-needed cash injection of up to £20 million, should it sell all its 25 take-off and landing slots at Gatwick.

The airline confirmed it is in sale talks with a "number of parties" - reported to include easyJet. A successful deal would bolster easyJet's presence in the London market and help fuel its booming growth.

Flybe has endured a torrid time since floating on the stock market at the end of 2010, hammered by soaring fuel costs, falling passenger numbers and higher airport duty.

It is axing around 10% of its 3,000-strong UK workforce to cut costs by at least £35 million and is also reviewing its network of 13 UK bases, which include Bristol, Cardiff, Doncaster, Edinburgh and East Midlands.

Selling all the slots would see Flybe quit its main London hub, although it also flies a small number of planes from Luton airport.

Flybe flies to destinations including Belfast, Edinburgh, Glasgow, Guernsey, Jersey, Newquay and Paris from Gatwick.

Flybe said: "Discussions are ongoing and there can be no certainty as to whether any transaction will be forthcoming." Flybe is expected to post another year of losses for the year to the end of March.

EasyJet is due to report further growth when it posts half-year results on Wednesday, helped by Britons heading overseas to avoid the UK's weather misery. The group's loss for the seasonally quieter first half is expected to roughly halve to between £60 million and £65 million, compared with £112 million a year ago.

The carrier has consistently beaten City expectations for profits, propelling it into the FTSE 100 Index. EasyJet declined to comment.

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