Flybe, the embattled regional airline, is locked in talks to raise vital funds by selling runway slots at London Gatwick in a move that could provide a further boost to budget carrier EasyJet.
Shares in Flybe, which is run by Scots-born chairman and chief executive Jim French, leapt 13 per cent as news of the discussions emerged.
Should the Exeter-based group sell all its 25 take-off and landing slots at Gatwick it would provide a cash injection of as much as £20 million.
In a statement to the stock exchange, the airline confirmed it was in sale talks with a “number of parties” – thought to include EasyJet. A successful deal would bolster Luton-based EasyJet’s presence in the London market and help fuel its growth.
Flybe has endured a torrid time since floating on the stock market at the end of 2010, hammered by soaring fuel costs, a
decline in passenger numbers and higher airport duty.
It is cutting about 10 per cent of its 3,000-strong UK workforce to trim costs by at least £35m and is also reviewing its network of 13 UK bases, which include Edinburgh, Bristol, Cardiff, Doncaster and East Midlands.
Disposing of all of the Gatwick slots would see the carrier quit its main London hub, although it also flies a small number of planes from Luton airport.
The airline flies to destinations including Edinburgh,
Glasgow, Belfast, 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.”
Analysts at Espirito Santo said: “Realising value from its Gatwick slot portfolio could help Flybe reinforce its balance sheet.”
The airline is expected to post another period of losses for the year to the end of March. Shares closed up 6.9p at 58.9p.
Easyjet is tipped to report further growth when it posts half-year results tomorrow, 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 £60m and £65m, compared with £112m a year ago.
The carrier has consistently beaten City expectations for profits, propelling it into the FTSE 100 index.
Meanwhile, Scotland’s three main airports recorded more passengers last month than at the same time a year ago, according to figures released yesterday.
Edinburgh airport saw a 4.4 per cent jump in people passing through its terminal, to 801,576 for the month, with passengers using international routes up by 10 per cent.
Almost 550,000 people used Glasgow airport during April, up 0.4 per cent year-on-year, while Aberdeen reported a 3.7 per cent gain to 284,600.