Regional airline Flybe said market turbulence will send it swinging to a "small loss" as it grapples with slowing demand and a spate of cancelled flights.

The firm expects to sink into the red when it posts full-year results to March 31 2017, down from pre-tax profit of £5.5 million last year.

The announcement came as it outlined the litany of problems facing the business, including weaker demand, price competition from rival airlines and train operators, flight cancellations caused by the weather and the impact of industrial action by French air traffic controllers.

It also warned that profits would be £5 million to £10 million lower following a major systems upgrade designed to bolster online sales and improve customer experience.

Chief executive Christine Ourmieres-Widener said the airline had moved to drive down costs while reducing its flight capacity.

She said: "I continue to be very excited about the opportunities in Flybe, especially as we are now able for the first time to take control of our fleet size to reduce overcapacity.

"Flybe is increasingly a digitally enabled business, with 80% of bookings already being made via our website.

"To seize this opportunity, we must first rebuild some of our core systems and this is now starting.

"We shall continue to reduce costs, work with our partners to improve efficiency and stop unprofitable flying."

Updating on its performance, it said passenger revenue for the fourth quarter rose 9.8%, down from 13.5% in the quarter before.

However, passenger yield - a measure of passenger revenue without tax and levies - lifted by 2.9% over the period, up from 2.8% in the third quarter.