Exeter airline Flybe profits hit by volcano ash

Image caption, The airline expects to make pre-tax profits of about 拢22m in 2011

Disruption caused by Iceland's volcanic ash cloud and freezing winter weather helped push Exeter-based airline Flybe into making a loss over the last year.

The company made a pre-tax loss of 拢4.3m, compared with a profit of 拢24.6m the previous year.

The effects of the ash cloud and snow in December cost 拢18.1m said the firm.

The eruption of the volcano in April 2010, which affected flights in northern Europe, forced Flybe to cancel 3,177 flights.

Challenging time

It was also hit by a slump in demand from leisure passengers as a result of falling consumer confidence although travel by business customers held up.

The airline, which plans to expand into new European markets, expects to make pre-tax profits of about 拢22m in the current year.

The airline is introducing a fuel surcharge of 拢3 in September to help it deal with higher costs.

Chief executive Jim French said he was very pleased with the results in what had been a challenging time for airlines.

Shares were up 7% after Flybe confirmed it was in talks with other overseas airlines in Europe about the possibility of acquisitions, taking part in joint-ventures or using its expertise to help them expand.