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Flybe, the troubled Exeter-based airline, has seen losses increase after seeing passenger numbers fall and fuel costs rise.

a pre-tax loss of £40.7m for the year to 31 March, against a loss of £6.2m the year before.

Flybe has shed hundreds of jobs and is looking sell assets as it attempts to revive its fortunes.

It is selling 25 pairs of arrival and departure slots at London Gatwick to Easyjet for £20m.

The airline has also deferred the delivery of 20 Embraer aircraft, and has agreed in principle to cut its pilots' pay by 5% in return for extra time off.

Flybe said UK passenger numbers fell by 1.1% last year to 7.2 million from 7.3 million. Fuel costs rose to £122.6m from £106.4m the year before.

"Our results for 2012-13, while expected, are nonetheless disappointing. During the year, we have taken difficult decisions as part of our turnaround plan, which have affected all our people," said chief executive Jim French.

"Our turnaround plan has involved considerable efforts to reduce the cost base of the business. Inevitably, and sadly, this process has to date involved the departure of around 490 people from the business."