* First-half pretax loss at 15.3 mln stg
* Says EU 261 flight delay claim rules unfortunate
* Shares fall as much as 23 pct
By Esha Vaish
Nov 12 (Reuters) - British budget airline Flybe Group Plc swung to a pretax loss in the first half, hurt byone-off costs and a charge related to its exit from its Finlandjoint venture.
Flybe's stock fell as much as 23 percent to 102 pence,making it one of the top percentage losers on the London StockExchange.
The carrier posted a pretax loss of 15.3 million pounds ($24million) in the six months ended Sept. 30, compared with aprofit of 13.8 million pounds a year earlier.
Flybe was hurt by an increased flight delay claimsprovision, external costs related to surplus capacity andrevaluation of U.S. dollar aircraft loans.
The company booked an impairment charge related to the saleof its 60 percent stake in loss-making Flybe Finland to partnerFinnair.
Citing slower capacity growth and higher market costs,Liberum analyst Gerald Khoo cut his full-year forecast to a"small pre-tax loss".
The embattled carrier had only just returned toprofitability last year, helped by brutal cost-cutting thatinvolved giving up airport slots, slashing jobs, exitingunprofitable flight routes and grounding surplus fleet.
However, new EU 261 flight delay compensation regulationsthat dictate procedure in events of denied boarding, flightcancellations, or long delays of flights, forced the company torecord a 6 million pound provision in the first half.
Chief Executive Saad Hammad called the rules "unfortunate"and "discriminatory", as, in terms of fares, on most of theroutes Flybe operated it mainly competed with rail roads andferry operators who do not have compensation regimes.
"It's unfortunate because (compensation for) any delay ofthree hours or more is more than three times the average ticketprice of Flybe," Hammad told journalists on a call. Flybe pegsits average ticket price at less than 85 euros ($106).
Numis analysts said the law would have a negative costimplication for all airlines and tour operators, which mighttempt them to increase fares for passengers.
They said given that the estimated provision amount would beroughly 0.5 percent of Flybe's full-year turnover, larger rivaleasyJet Plc's full-year pretax profit could take a hitof about 4 percent. easyJet is to report on Nov. 18.
(1 US dollar = 0.6282 British pound) (1 US dollar = 0.8020 euro) (Reporting by Esha Vaish in Bangalore; Editing by Maju Samuel)
