Loganair sees 'modest signs of recovery' in bookings after revealing big losses

Loganair is seeing “modest signs of a recovery” in bookings after the airline dived heavily into the red at the outset of the pandemic.

The company is in the process of filing accounts for the year to the end of March 2020, which show a loss before tax of £12.7 million.

Nearly £3m was attributable to the onset of the pandemic in the final month and the associated re-valuation of fuel and currency contracts as required under accounting standards, the airline noted.

The reported loss also reflects the progress on the carrier’s fleet renewal programme during the year – leading to a charge of £7.5m associated with the retirement of older aircraft. In addition, there was a charge arising from an industrial dispute by air traffic controllers at HIAL airports.

Loganair, headed by chief executive Jonathan Hinkles, is now the UK’s largest regional airline, with over 70 domestic routes plus services into Ireland, Norway and Denmark.

Turnover grew from £120m to £169m during the year as the Glasgow-based group phased out its older Saab 2000 and Dornier 328 turboprops and introduced ATR turboprop aircraft to its fleet. It now has seven of the new aircraft in service..

For the financial year now drawing to a close, Loganair expects to report a significantly narrowed loss thanks to new income from contract and charter flying and a “rigorous” focus on costs.

To ensure that its financial foundations are secure for the future, Loganair was an early adopter of the UK government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS), in July 2020. The airline agreed a £25m loan facility with Clydesdale Bank and owners Stephen and Peter Bond simultaneously agreed a package of support amounting to £11m over two years.

Chief executive Jonathan Hinkles said: “The last 12 months have placed an extraordinary burden on everyone, yet we are incredibly proud of the efforts which Loganair’s team has made to continue delivering for the communities that we serve.

“In addition to our long-standing duties and responsibilities in the Highlands and Islands, we’ve added new contracts in the oil and gas industry, and stepped in to safeguard 16 routes following the collapse of Flybe.

“As the UK’s vaccine programme continues apace, we are already seeing modest signs of a recovery in bookings on domestic routes for the year ahead.”

The airline will resume services on several routes during April, with others following through May and June.

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