Budget airline Flybe has issued a profit warning, blaming weak demand, a weaker pound and higher fuel prices.

It now estimates a full-year loss of £12m - much more than the £3.5m loss that experts had been expecting.

The airline said that it earned 6.8% more passenger revenue per seat and had improved its efficiency in filling flights to popular locations.

"Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs," said Flybe's chief executive Christine Ourmières-Widener.

"We continue to strengthen the underlying business and remain confident that our strategy will improve performance."