Short-haul airline Flybe has pledged to concentrate its operations on regional hubs such as Birmingham after a turbulent year sent it nosediving deeper into the red.

The business and leisure carrier, which already has a heavy presence at Birmingham, said it hoped to make savings of £50 million by 2014/15 after slashing more than 20 per cent of its workforce and cutting pilot pay by up to five per cent.

Flybe said it would concentrate on its core bases, including Birmingham, after selling lucrative slots at Gatwick.

Chairman and chief executive Jim French predicted the move would help the airline break-even in the current financial year after underlying pre-tax losses widened to £23.2 million in the 12 months to March 31 from £7.1 million after being squeezed by higher fuel costs and a declining domestic market. Bottom line losses increased to £40.7 million from £6.2 million a year earlier.

Mr French said cost-cutting recent actions meant it was “now more strongly placed for the future”.

He added: “Our choices with regard to cost savings, outsourcing, headcount reduction, aircraft delivery deferrals and the sale of our Gatwick slots demonstrate the resilience and single-mindedness of the management team to turnaround Flybe.

“We have taken difficult decisions as part of our turnaround plan, which have affected all our people.”

The group has secured £30 million of cost savings for 2013/14 and aims to increase this by another £20 million over the next two years. It has already cut around 490 roles, with a further 90 planned.