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Flybe, the Exeter-based airline, has announced plans to cut 500 jobs across the business, despite reporting a return to profit.

Pre-tax profits were £13.8m for the six months to 30 September, compared with a loss of £1.6m a year earlier.

The company said its turnaround plan was on track to make £40m of savings this year and £45m in 2014-15.

But the pilot's union, Balpa, said it was "shocked" by the decision to cut jobs. Flybe employs 2,700 staff.

Flybe has been carrying out cost-cutting measures, but chief executive Saad Hammad, who joined the company in August, said more were now needed.

"It was clear to me that the existing Phase 1 and 2 cost savings were necessary but we simply needed to do more and to do it immediately," he said

Mr Hammad told the ´óÏó´«Ã½ he could not say where the latest job losses would fall at this stage.

"We're consulting with unions and our staff," he said.

Flybe cut 490 jobs in 2012-13, with a further 100 going in the first half of 2013-14.

As part of the cost-cutting programme some routes could "possibly" go, Mr Hammad said. "These are challenging times," he added.

Group revenues rose to £351.1m in the six months, up from £340.8m in the same period last year.

The carrier now has 96 aircraft in its fleet, with 28 belonging to Flybe Finland, its joint venture with Finnair.

Passenger numbers increased 5.6% to 4.3 million in the first half of the year.

Investors welcomed Flybe's decision to carry out additional cost cuts, sending its shares up by 40.5% to 95.75p.