The Exeter-based carrier’s chief executive, Saad Hammad, will also review unprofitable routes and bases and improve aircraft and crew utilisation.
The measures are expected to save the airline £26 million a year from next year, on top of previous initiatives to save £40m this year and £45m in 2014-15.
Flybe, which has been cutting jobs and trimming pilot salaries, 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.”
The British Airline Pilots’ Association (Balpa) said it was shocked by the announcement and called on the UK government to play its part by reducing the impact of air passenger duty.
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.
“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 per cent to 4.3 million in the six months to the end of September.
A 3 per cent rise in group revenues to £351.1m helped it return to the black with a pre-tax profit of £13.8m, compared with a £1.6m loss a year ago.