Flybe to axe all domestic flights from Gatwick

Flybe is to axe all of its Gatwick flights, having sold its arrival and departure slots at the London airport to easyJet for £20 million.

It announced to the London Stock Exchange this morning that it will pull out of the airport, from where it has operated for 22 years, at the end of March 2014.

It  will mean the loss of flights from the London airport to Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay.

EasyJet said it would use the 25 pairs of slots it has acquired to launch new routes from Gatwick and to add additional flights on its most popular existing routes. Further details will be announced at the end of this year.

Flybe blamed its decision to pull out of Gatwick on the airport’s pricing regime, which, it said, had led to a 102% rise over the past five years. It said Air Passenger Duty was also a factor.

The airline launched an expensive complaint to the Civil Aviation Authority in 2010, claiming that Gatwick was acting in an anti-competitive and discriminatory manner, but the CAA ruled in September that Gatwick was within its rights to raise its landing fees for smaller aircraft.

Flybe said that decision led to today’s "regrettable" announcement.

It said it will continue to operate all its seven domestic routes to Gatwick until March 29 next year.

Funds generated from the sale of the slots will be re-invested in its remaining 159 routes.

Flybe’s chairman and chief executive Jim French said: "No business can swallow such a massive increase in such a short period of time and it is with real regret and some anger that we have made this decision. 

"Flybe fully appreciates the implications this will have, not only on individual passengers but also on the wider regional economies that have come to rely on the convenient lifeline connections we provide to Gatwick.

"However, we have to accept the ugly reality that Gatwick simply doesn’t want smaller, regional aircraft at their airport and, with the absence of a regional aviation strategy and the government’s penalistic and ludicrous policy of charging Air Passenger Duty (APD) on both legs of a domestic flight, I’m afraid it’s inevitable that high frequency services from the UK’s regions will ultimately be squeezed out of Gatwick, as they have been from Heathrow."

He said Flybe will work with other UK airports to develop its regional services.

"Until March 29^th 2014, however, it remains business as usual and I can reassure all our customers that until then Flybe will continue to offer affordable, reliable and above average punctuality on our seven London Gatwick routes with no changes to pricing, frequency or timings," he said.

"The connectivity we provide for our seven million passengers through major international airports like Manchester, Birmingham, Glasgow, Edinburgh, Southampton, Amsterdam and Paris will mean that hundreds of international connections will also still be available.

"Gatwick airport may not want those connecting passengers, but others do. Flybe will work with our airports across the nation to ensure the UK’s regional passengers don’t get left in the cold."

Flybe also announced to the Stock Exchange today that it has made "significant positive progress" in its plan to return it UK-based scheduled airline to profitability.

It said it has surpassed its target savings of £25 million, with £30 million of annual cost savings delivered for year 2013/14 onwards, and the deal agreeing in principle with its pilots for a 5% reduction in salary in return for extra time off.

The sale of its Gatwick slots to easyJet is subjet to the approval of Flybe’s shareholders.