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Comment: City is strong in tough times

By Exeter Express and Echo  |  Posted: January 24, 2013

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By Express & Echo Editor Andy Phelan

FLYBE'S announcement of heavy job losses in Exeter is a major blow to the city and underlines again the fragile state of the UK economy.

It is one of Exeter's largest and most prestigious employers and the news that it is cutting almost 100 jobs at its base at Exeter Airport is a body blow.

Its management structure, based predominately in Exeter, is set to be worst hit, with around 20 per cent losing their jobs.

These are well-paid, skilled positions and there is always a knock-on effect when big companies start to lose staff in large numbers.

The airline's rapid growth in recent times is an Exeter success story. From its base in the city it has grown to become the largest regional airline in Europe, flying seven million passengers a year.

But these are tough times, and falling profits have led to drastic action. The airline claims only major job losses – 300 across the UK – will get it back on the right track. You don't need to be an economist to work out the problem. The margins it works with are incredibly tight. Flybe aims to break even next year, with profit rising to 60p a seat in 2014-15 and £3 a seat in three to five years on UK flights.

Over the past six years passenger numbers in the UK have fallen by 20 per cent while Air Passenger Duty, charged by the Government, has risen by 160 per cent over the same period.

In an industry as susceptible to the economic downturn as aviation, the problems facing Flybe should perhaps come as no surprise.

But it's not all doom and gloom.

As Tim Jones, chairman of the Heart of the South West Local Enterprise Partnership, says: "Clearly any job losses are bad news, particularly in such a successful company as Flybe. But I don't see this as a reason to panic. Flybe has proved incredibly adept at finding new markets and making adjustments to ensure they are successful in the long term, and that's what we need for the good of the Exeter economy."

Flybe's problems won't be the end of job losses in Exeter. The important thing is that the city's economy remains diverse enough and strong enough to deal with tough times.

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