Flybe is on track to slash its cost base by £40 million during the current financial year, the Exeter-based airline has told investors.
Annual savings are expected to rise to £49 million from 2014/15 onwards as the company presses ahead with the turnaround plan unveiled at the start of this year.
Restructuring costs during the second phase of the plan are expected to total around £5 million, with more than half that amount already spent during the first quarter of 2013/14. Around 490 people have left the business so far this year.
Meanwhile, recent trading was said to be in line with expectations. In the three months to the end of June, Flybe UK's revenues of £152.4 million were down 1.2% on the same period a year ago.
But Flybe UK managed to increase passenger numbers by 4.9% to two million while trimming capacity, cutting the number of seats flown by 1.6%. As a result, the all-important load factor – the average number of seats filled on Flybe flights – increased from 62.2%to 66.5%.
In its first trading update since new chief executive Saad Hammad took charge last week, Flybe said: "The board continues to anticipate challenging market conditions and that group revenues will be broadly flat year-on-year.
"The group will maintain its focus on lowering its cost base and is on target to deliver savings of circa £40 million in the current financial year, partially offset by expected headwinds such as an adverse US dollar exchange rate versus 2012/13. The board therefore believes that it remains on track to deliver results in line with its expectations for the year."
Since Mr Hammad's arrival the roles of chairman and chief executive have been split, with Jim French becoming non-executive chairman. The board has also been restructured, with the number of executive directors reduced from five to two. A search for a new chief financial officer is under way after Andrew Knuckey announced his intention to leave the airline.
Flybe said: "Concurrent with the cost reduction programme, the new leadership team has commenced a full review of the group's operations and will report in due course on the future strategic development and direction of the business."
Overall, Flybe's revenue under management increased by 18.5% to £229 million due to increased contract flying in Flybe Finland, its joint venture with Finnair.