Flybe plunges on fresh profit warning Flybe shares plunged on Tuesday after Europe's largest regional airline announced a fresh profit warning as a deteriorating UK air travel market weighs on sales. The group blamed poor sales during December in particular for creating "a significant shortfall against our revenue expectations" in the third quarter, which ended on December 31. UK domestic air travel, which represents about 70 per cent of Flybe's activity from UK airports, had experienced a 6 per cent year-on-year decline in the first half of the year, it said. That had swollen to an 8 per cent year-on-year fall by the end of the third quarter. The company added that volumes were stable, so it was increasing market share in a declining market. "The UK domestic market is clearly challenging," said Jim French, Flybe's chief executive. Under such circumstances I believe that maintaining volumes and growing market share at the expense of planned yield increases was the correct decision to protect the long-term potential of Flybe. Shares in Flybe, which floated in late 2010 at a price of 295p, were 24 per cent lower at 52p in early London trading. Investec, the airline's in-house broker, revised its full-year forecast to a pre-tax loss of £8.5m from a pre-tax profit of £6.4m. Andrew Fitchie, an analyst at the broker, said: "It's a tricky one - they are doing everything they can but when the tide is going out, it's going out. The revenues they've been getting are flat, but they need higher prices to offset higher fuel charges. Last October, Flybe shares tumbled by more than one-third to a then record low of 65p after the company reported a significant slowdown in sales during September. The following month, Flybe said it was cutting the number of flights it offers in the UK by 6 per cent during winter in response to slack demand and rising oil prices. Bigger rival Ryanair has also grounded aircraft this winter, prompted by higher fuel costs.