AIRLINE Flybe posted flat revenues in the UK as it highlighted the tricky conditions that caused its shares to hit turbulence last month.

Europe’s biggest regional airline, which flies from airports including Bristol, Cardiff, Doncaster, Edinburgh and East Midlands, said UK sales were down 0.3% on a year ago to £133.7m in the final quarter of 2011.

The figure confirms last month’s warning that revenues would be significantly lower than it hoped, fuelling fears in the City for a full-year loss.

Shares plunged more than 20% after the downgraded guidance but were 3% higher yesterday as investors were comforted by the absence of any more bad news.

It has reduced capacity by 6% on January a year ago and said yesterday it has seen passenger revenues per seat improve by 3% as a result.

Chairman and chief executive Jim French said: “Although we expect market conditions to remain challenging, we have a robust and flexible business model and clear and achievable growth plans.

“We remain confident about Flybe’s long term future.”

Investec analyst Andrew Fitchie stuck by his forecast that Flybe will make a loss of £8.5m in the year to March 31, compared with pre-Christmas predictions of a profit of £6.4m. And he anticipates further losses of £1.3m the following year.

Flybe said its share of the UK regional market, excluding London, was 50.5% last year, compared with 48% a year earlier. Its UK arm carried 1.7 million passengers in the quarter to December 31.

Flybe’s entry into continental Europe through Flybe Finland, its joint venture with Finnair, meant total revenues increased 18.6% to £165.5m.