Stobart Group, London Southend Airport owner, ditched plans to purchase UK-based regional carrier Flybe.

Following the announcement, Flybe’s shares plummeted by 24.8% in early trading.

Stobart Group on Thursday said they were “unable to reach agreement on satisfactory terms” with Flybe.

In a statement Stobart Group said, “The board of Stobart Group has determined that it is not in its shareholders’ best interests to increase its latest proposal for Flybe above the level which was rejected by the board of Flybe.

“Given this, Stobart Group confirms that it does not intend to make an offer to Flybe.”

Over the last four years, Flybe’s shares have been spiraling downwards with the all-time low recorded in December. In addition, most investors opted out after two profit warnings were issued last year.

The financial woes facing the carrier have in recent years led to its downsizing by more than 1,000 jobs and the closing of unprofitable sites. Further, the airline value has dipped by more than £300m to £74m in less than four years.

The company blamed its financial problems on an overcrowded European market and high maintenance costs.

In spite of the pullout, Flybe remains optimistic. In a statement the carrier said, “The board remains highly confident in the prospects of Flybe and believes that the group continues to have an exciting future as an independent company, delivering the sustainable business improvement plan as set out in June 2017.

“This plan is focused on driving sustainable profit and cash generation and will see the fleet size reduce to an optimum level for the number of identified profitable routes and make the business demand-driven rather than capacity-led.”

By Airport Pickups London