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Highland Airways goes into administration; operations suspended

26-Mar-2010 10:41 AM

Highland Airways, an Inverness based airline, was placed (25-Mar-2010) into Administration on 24-Mar-2010 and has suspended operations with immediate effect. The airline, which held a CAA Operating Licence and Air Operating Certificate, provided scheduled services from Inverness to the Scottish Western Isles and between Cardiff and Anglesey. Whilst the Administrator is reviewing the position, the company is not expected to resume services in the near future and is contacting passengers who were due to travel to advise them to make alternative arrangements. PricewaterhouseCoopers has been confirmed as the airline's Administrator, with the carrier's 100 staff expected to become redundant (BBC News/The Guardian/The Telegraph, 25-Mar-2010). [more]

With nine aircraft, Highland Airways operated a number of crucial, subsidised air links to the small Hebridean islands of Coll, Colonsay and Tiree, Stornoway on the Isle of Lewis and Benbecula in the Western Isles, as well as services between Cardiff and Anglesey. Rival airlines are being asked to take over essential services to the islands, with Scottish Transport Minister, Steward Stevenson, stating every effort was being made to minimise service disruptions by bringing in other operators, with the government due to confirm new operators within days. Flybe franchise carrier, Loganair, stated it would offer service between Stornoway and Benbecula from 29-Mar-2010, with twice daily frequency on weekdays.

Highland has struggled to stem increasing losses, which worsened significantly after the severe weather over Winter led to flight cancellations, adding to its debts. Hopes of finding a new investor failed, leading to the carrier entering voluntary administration. Highlands and Islands Enterprise (HIE) stated it "deeply regretted" that the airline has suspended operations, with HIE investing GBP620,000 to support a management buy-out in 2007, with another GBP103,000 grant in 2008.

Highland Airways: "The Directors have now concluded that the option of maintaining operations while introducing a new investor is no longer feasible. As administrators we are conscious that Highland provided a valuable service within Scotland and Wales and we will be working with contracted customers to ensure an orderly handover of services to new operators wherever feasible. It is inevitable that there will be a substantial number of redundancies but we will endeavour where feasible to assist the work force in securing employment with the new service providers," Bruce Cartwright, Joint Administrator and Head of Business Recovery at PricewaterhouseCoopers in Scotland. Source: The Guardian, 25-Mar-2010.