Regional airline Flybe has issued another profits warning and blamed worsening market conditions for leaving more empty seats on its flights.
The group, which flies from airports including Edinburgh, Bristol, Cardiff, Doncaster and East Midlands, suffered a decline in trade in the three months to June 30 as UK passenger numbers fell 3% to 1.9 million, leaving its planes less than two-thirds full.
Chief executive Jim French warned the Exeter-based firm was battling "another very challenging year" after its UK domestic market slipped into a 3% decline in June, having previously shown signs of stabilising following four years of contraction.
And with business travel to Europe also under pressure, it warned revenues could fall as much as 2% in the year to March and will at best be flat, sending shares down 14% as analysts slashed profit forecasts.
Although the Queen's Diamond Jubilee and the Olympics distorted recent trends, the group said it would respond with more cost-saving measures and will update the market in November.
UK sales rose 0.7% to £156.4 million, reflecting a slight rise in average revenue per passenger. But its growth has been hit after the Office for Fair Trading ordered hidden debit card charges to be scrapped from April.
The fall in passenger numbers left its planes just 62.4% full, down from 63.1% a year ago.
The group has issued a series of profits warnings in recent years, causing its shares to slump in value from about 325p at the time of its flotation at the end of 2010 to 64.3p on Friday afternoon.
Investec analyst Andrew Fitchie said the update was disappointing, adding that Flybe's domestic routes have "adverse economic backdrops".
He now expects the group to make a £14.5 million loss this year, having previously expected £500,000 profits.