Monday, 30 March 2020

Loganair to seek more government aid.....

One of the UK's largest regional airlines Loganair is to seek a government bailout as the airline struggles to continue to operate, which it says is due to the coronavirus COVID-19 pandemic. 

Loganair was the sister airline to flyBMI, which went into administration with massive debts in February 2019.  Both airlines were owned by Airline Investments Limited, which has been accused of asset stripping flyBMI in the days and hours before placing it into administration, to avoid paying millions in compensations for delayed and cancelled flights.

Loganair is continuing to fly most routes at present - according to its website the carrier is operating schedules on the following routes until 20th April.

- Aberdeen-Kirkwall
- Aberdeen-Manchester
- Aberdeen-Norwich
- Aberdeen-Sumburgh
- Glasgow-Barra
- Glasgow-Benbecula
- Glasgow-Campbeltown
- Glasgow-Islay
- Glasgow-Stornoway
- Glasgow-Tiree

- Isle of Man-Liverpool
- Isle of Man-Manchester
- Kirkwall-Sumburgh
- Orkney inter-isles air services
- Stornoway-Benbecula

- City of Derry-London Southend 

A number of these routes are operated on a public service obligation - PSO basis - which means the airline is obligated to provide a service on the routes after winning a tender process and getting subsidies from the government to operate the routes.  

The Scottish airline will also be paying no business rates this year, following an announcement from Michael Matheson, Cabinet Secretary for Transport, Infrastructure and Connectivity, who said: “Our aviation industry is facing an unprecedented challenge in the face of the coronavirus outbreak, so the Scottish Government is doing everything it can to provide support at this difficult time.

“Airports, ground handling service providers and Loganair will receive 100% business rate relief for a year, as part of the £2.2bn support package announced to help businesses deal with the impact of the outbreak".

Jonathan Paul Hinkles, Loganair's Managing Director and Airline Investments Limited shareholder told the BBC that connectivity of remote Scottish islands, rural communities across the UK "cannot be maintained without air services" and demanding that a government bailout for Loganair was "essential".  Around half of the carrier's fleet of 45 aircraft are currently grounded, Hinkles warned "We can't just shut down - Morally, we have to fly."

Hinkles also accused other airline bosses, such as those at easyJet and Ryanair of not telling the truth, telling the BBC's, Tom Burridge, that any airline saying it could survive without government help "would probably be lying".

There is no doubt Loganair provides a valuable service in connecting some rural areas, particularly the Scottish Islands, where it operates one of the worlds shortest air routes between Westray Airport and Papa Westray, a distance of just 1.7 miles. It would be a shame that an airline with such heritage should disappear, yet it already receives government aid in various forms that allow it to continue to operate, its sister airline went bust stranding hundreds of passengers and leaving thousands more out of pocket, so perhaps the directors of Airline Investments Limited should put more money into the company before expected tax-payers to bail them out. 

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