Flybe has become the latest airline to slash growth plans this winter as the economic downturn squeezes demand for flights.

The Exeter-based carrier is flying 400,000 fewer seats than it expected to between October and March, after a decision to reduce growth in capacity. The Spanish carrier Futura brought confirmation of the difficulties facing the industry when it filed for administration and suspended flights for a day.
Jim French, Flybe's chairman and chief executive, said the airline's business customers were starting to rein in spending, which prompted a change in growth plans. ""We are beginning to see that some of the corporate accounts are slowing down,"" he said. However, French cautioned that Flybe was not seeing ""anything dramatic or anything that scares us"".
""I describe it as trimming the hedges as opposed to pulling the hedges out."" Instead of increasing capacity by 16% over the winter, Flybe will grow by 6%.
Flybe is cutting back by flying fewer services to its UK and European destinations, which include Paris, Frankfurt and Brussels. The move reflects cutbacks by easyJet, Europe's second-largest low-cost carrier, which is cutting flights but not grounding planes or dropping routes.
French added that he was happy with Flybe's cash balance which, according to full-year results published, stands at £67.4m. This is dwarfed by that of stronger low-cost rivals such as easyJet and Ryanair. ""Is it adequate for what we are facing? Yes. Would we like a bigger cash balance? Of course we would and we will grow it at some point in the future.""
Business passengers account for about 45% of Flybe's customer base and the airline believes that this gives it a stronger footing than Ryanair in the event of a downturn. Michael O'Leary, Ryanair's chief executive, claimed recently that Flybe would be among the industry's next casualties in a downturn that has seen 25 carriers go bust so far this year.
""We are not immune, but we are better insulated,"" said French. Flybe, which is majority owned by the estate of the late steel tycoon Jack Walker, has shelved plans for a flotation.
(Source: Guardian)