Struggling Highland Airways claims new investor on the way

Published on Monday 25 January 2010 21:46

A NEW investor could come to the rescue of a troubled Scottish airline in the next few days.

Inverness-based Highland Airways says it is operating as normal, but visitors to its website yesterday were greeted with a message that said: "Sorry! We are currently unable to take any bookings… please bear with us whilst we try to resolve technical difficulties."

Its 100 staff were told yesterday the company was currently facing "difficult trading", exacerbated by recent severe winter weather, which reduced flying.

The company's difficulties follow the collapse of another Scottish airline, Flyglobespan, in December.

In a statement yesterday, Highland Airways said: "The board has been seeking new investment and has been in discussion with several parties in recent weeks.

"Negotiations are ongoing with a potential investor that provides an excellent way forward for the company. The outcome of all these discussions should be judged within days, rather than weeks."

Last week, a contract with BAE Systems to shuttle workers to and from a site in Lancashire to RAF bases in England was terminated. It is believed another contract, involving an internal flight in Finland, has also been lost.

The company, set up in 1991, carries about 20,000 passengers a year in Scotland.

It receives an annual subsidy of 464,446 from Western Isles Council to run a Stornoway- Benbecula route, while Argyll and Bute Council pays 452,700 annually for services between Oban and Coll and Colonsay.

The Welsh Assembly government also gives 800,000 a year for a Cardiff-Anglesey link.

Highland also operates passenger services between Inverness and Stornoway and Benbecula, as well as contracts to deliver newspapers to Orkney, Shetland and the Western Isles and mail to the Western Isles. In addition, it carries out corporate and other charter services, and in 2004 the company was awarded a 1 million fisheries protection contract.

An aviation industry source said yesterday: "Highland Airways has filled a niche role in the aviation industry over the last few years. There are a number of services they do, such as the one from Oban, for which there are no obvious contenders to take them on if Highland wasn't there."

A management buy-out of the airline in 2007 was backed by 620,000 from Highlands and Islands Enterprise (HIE). It gave a further 103,000 in 2008 to help to expand the fleet.

To date, the agency has received an interest payment of 41,780 on its original investment.

A HIE spokeswoman said: "The firm's directors are in active discussions with potential investors, and we are hopeful of a positive outcome."

Highland Liberal Democrat MSP John Farquhar Munro said: "If this service is in danger, it is important for all relevant parties to work out how it can be maintained."