REGIONAL airline Flybe said today it has seen no let-up in the “challenging” conditions which have left its share price grounded in recent months.

Flybe is forecast to report a loss for the year to March 31, although in a final trading update today it said the final quarter of the period had been in line with its hopes.

This helped its shares slightly, but the stock is still well below levels seen prior to a profits warning in early January caused by weaker demand for flights in the UK.

Flybe, which serves more than 100 destinations across Europe, including flights from around 30 UK airports, said market conditions remain challenging but that it was helped by its “robust and flexible” business model.

It is working on plans to increase revenues per seat, delivering cost reductions and ways to better match capacity to demand. Further details on the measures will be announced with full-year results in June.

“Although market conditions remain challenging, we have a robust and flexible business model combined with clear and achievable growth plans. We remain confident about Flybe’s long term future,” the group said.

Flybe’s UK operations currently include flights from Norwich Airport to Edinburgh, Exeter and Manchester.

Summer services from Norwich to Guernsey, the Isle of Man, Jersey and Newquay are also due to start by the end of May.

Airline analyst Andrew Fitchie, of Investec Securities recently said he expects Flybe to make a loss of �8.5million in the year to March 31, compared to pre-Christmas predictions of a profit of �6.4m.