Regional airline Flybe has warned jobs may be at risk as it slashes costs after the most challenging conditions in its 10-year history sent it into the red.

The carrier, which flies from several Scottish airports, outlined plans to make savings equivalent to £2 a seat as it said there was "little sign of recovery" in the UK domestic market.

It warned there may be some impact on its workforce – consisting of 3000 staff in the UK and up to 700 in Europe – as part of a group-wide review of costs.

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Flybe reported pre-tax losses of £1.3 million in the six months to September 30 against profits of £14.3m a year earlier after being hit by sky-high fuel costs and falling numbers of fliers.

UK passengers fell 3.6% to four million.