Loganair looks for clouds to part after profits dive

Regional carrier Loganair has seen its annual profits halve after it was buffeted by a number of 'significant challenges' during the year as bosses vowed today to improve its poor reliability record.

Loganair insisted its reliability was improving. Picture: Contributed

The firm said the oil sector downturn had taken its toll, affecting both scheduled and charter passenger numbers through Aberdeen.

During the year it also saw the reliability of services hit by technical issues with its aircraft and an “unforeseen loss” of skilled aviation engineers.

Accounts for the 12 months to the end of March, published today, reveal that pre-tax profits slumped to £3.6 million, down from almost £7.1m the year before, as the airline also undertook substantial investment to tackle the punctuality and reliability issues. There was a 2 per cent increase in turnover to £95.3m.

Jonathan Hinkles, managing director of Loganair. Picture: Chris James

Glasgow-based Loganair said that elsewhere in its network, customer demand on scheduled services held steady amid a challenging backdrop for the aviation industry. Routes from Inverness to Manchester and Dublin were taken over from franchise partner Flybe and contributed to the increase in turnover.

The Scottish Government public service obligation contract for routes out of Glasgow serving Campbeltown, Tiree and Barra was renewed, using new Twin Otter planes which have been acquired from their Canadian manufacturer and leased to Loganair to undertake the long-standing services.

Chairman David Harrison said: “Reliability of our services fell below what our customers should rightly expect, but we have invested heavily in our engineering resource, and now have a full complement of appropriately trained staff in place.

Jonathan Hinkles, managing director of Loganair. Picture: Chris James

“We’re now starting to see growth once again in customer numbers on many of our routes as a result of the improving reliability.”

Recent performance statistics for the Loganair network have pointed to a marked improvement in punctuality and reliability. This has coincided with the arrival of new managing director Jonathan Hinkles, Loganair’s former chief operating officer who returned in June after four years with Virgin Atlantic.

Hinkles said: “Our results for 2015/16 reflect the turbulence experienced by Loganair’s customers as a result of operational issues. We have made very significant progress since then to achieve the levels of punctuality and reliability that our customers are entitled to.

“In the third quarter of 2016, our punctuality has improved from 79 per cent a year ago to 86 per cent this year and the number of flights cancelled or significantly delayed has fallen by two-thirds.”

Loganair famously operates the world’s shortest scheduled air service, linking the Orkney islands of Westray and Papa Westray, regularly taking just two minutes to complete the journey.

The annual report showed the group’s overall headcount had increased to 575 from 547.

Click here to ‘Like’ The Scotsman Business on Facebook