The Exeter-based carrier, which currently flies about 340 flights a week between Gatwick and destinations around the UK, said its pilots have agreed a 5% pay cut, while it will also cut more jobs.
It recently warned annual losses for the year to March will be deeper than feared at around £23 million as it is squeezed by higher fuel costs and the tough economy.
Flybe will cease flights from Gatwick next March, where it currently flies more than half a million passengers to destinations around the UK. EasyJet today said it will review the routes, but there is no obligation for it to maintain them.
Flybe is selling the 25 pairs of take-off and landing slots to raise vital funds after struggling badly during the downturn. It blamed higher taxes and "discriminatory pricing" at Gatwick, owed by private equity and sovereign wealth funds, for its decision to quit the airport.
Flybe flies to and from Newcastle, Jersey, the Isle of Man, Inverness, Guernsey, Belfast and Newquay from Gatwick. It flew 550,000 passengers from the airport in its latest financial year. It said there will be no change to the routes' frequency or timings while it still operates the slots.
Flybe also revealed another 80 redundancies, on top of almost 600 staff - or 22% of its workforce - who have been axed so far as part of plans to save at least £35 million a year. The airline has delayed the purchase of 16 new aircraft from Embraer, saving £20 million in payments this year.
Its 650 pilots, most of whom are in the British Airline Pilots Association, have agreed in principle to take a 5% salary cut in return for extra time off, it added.
Flybe said: "It is the view of the board that the increase in charges, combined with the penalistic levels of air passenger duty imposed on UK domestic airlines by successive governments, have resulted in Flybe's services to and from Gatwick becoming unsustainable in the long term."