Regional airline Flybe, whose operations include services at Leeds Bradford Airport, has issued another profits warning as it blamed worsening market conditions for empty seats on its flights.

The group suffered a decline in trade in the three months to June 30 as UK passenger numbers fell three per cent to 1.9 million, leaving its planes less than two-thirds full.

Chief executive Jim French, pictured, warned the Exeter-based firm was battling “another very challenging year” after its UK domestic market slipped into a three per cent 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 two per cent in the year to March and will at best be flat.

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 per cent 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.