Embattled budget airline Flybe secures further $5m as it bolster finances ahead of potential sale

Embattled budget airline Flybe has raised a further $5m (£3.9m) as it continues to bolster its finances ahead of a potential sale.

Flybe said it secured the funds through a German bank Norddeutsche Landesbank, secured against a Bombardier aircraft.

The Exeter-based airline confirmed it was seeking a sale earlier this month after profits nosedived 54 per cent for the six months to the end of September.

A combination of higher fuel prices, a weaker pound and falling customer demand hit the airline, while it is committed to leasing Embraer jets between July and December next year, at a total cost of $114m (£88m).

It also announced a new strategy to use existing assets to generate cash and strengthen its working capital.

Last week the airline secured £5m from the sale and leaseback of a hangar facility at Exeter and Devon airport.

The new lease will see Flybe pay an annual rent of £515,000 for a term of 25 years.

Shares in the airline halved last month when the company issued a full-year profit warning, ahead of its half-year results last week.

Profits fell to £7.4m down from £16.1m the previous year.

Basic earnings per share dropped by more than half to 3.5p, and Flybe said it will not pay a dividend.

Flybe told investors the company was in discussions with a number of “strategic operators” regarding a potential sale and has appointed Evercore as its financial adviser.

Following reports Easyjet could be a potential buyer, its chief executive Johan Lundgren said he had no interest in Flybe.