Industry | 2010.03.25
Call for airlines to take over services to remote Scottish islands
The demise of Highland Airways leaves islands in the Hebrides and the Western Isles missing vital lifeline services
Rival airlines are being asked to take over lifeline services to remote Scottish islands, including subsidised flights for school pupils, after Highland Airways went into administration.
Most of the airline\'s 100 staff are expected to lose their jobs after the troubled firm called in PricewaterhouseCoopers yesterday evening to take over its operations after its attempts to organise a rescue plan floundered.
With nine aircraft, it operated a number of crucial, taxpayer funded air links to the small Hebridean islands of Coll, Colonsay and Tiree, Stornoway and Benbecula in the Western Isles, as well as flights between Cardiff and Anglesey. Its operations included newspaper deliveries, corporate staff shuttles and air charters.
Another service was the so-called "scholars flight", a scheduled service which flew teenagers from Coll and Colonsay to and from secondary school in Oban, where they board for weeks at a time, as an alternative to the lengthy ferry journey.
Scotland\'s first minister, Alex Salmond, told the Scottish parliament that urgent efforts were underway to find alternative carriers for these services. The civil aviation authority said the Inverness-based firm\'s operations had been suspended with "immediate effect".
Highland has struggled to stem increasing losses, which worsened significantly after the severe weather over the winter led to flights being cancelled, adding to its debts. Its crisis emerged several weeks ago but its hopes of finding a new investor evaporated, leading Highland to go into voluntary administration.
This was a "great disappointment," said a Scottish government spokesman. He said every effort was being made to minimise service disruptions by bringing in other operators. Stewart Stevenson, the Scottish transport minister, is due to confirm the new operators within days.
The spokesman added: "The company has made every effort to seek a buyer who would maintain the vital services which the airline provides.
"Also Highlands and Islands Enterprise and the Scottish government have worked tirelessly in an effort to ensure that the company had time to find a solution to maintain the business. Unfortunately, all options have now been exhausted."
Bruce Cartwright, joint administrator and head of business recovery services at PricewaterhouseCoopers in Scotland, said: "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."
Alan Reid, the Liberal Democrat MP for Argyll and Bute, said the loss of these services would cause anxiety for islanders. "They will be able to cope, but it\'s going to cause severe problems. For the schoolchildren on Colonsay, if they can\'t get it sorted out by next winter they won\'t be able to get home at weekends. These fights are also very useful for businesses and professionals getting to the islands."
The investment agency Highlands and Islands Enterprise (HIE) said it "deeply regretted" that the airline had folded. HIE had spent £620,000 to support a management buy-out in 2007, with another £103,000 grant in 2008.
Angus MacNeil, the Scottish National party MP for the Western Isles, said: "Highland Airways have provided a reliable service over the years in the islands, and it is a sad day when the company\'s demise has come about in this way. I will be asking questions as to the role played by the various creditors including HMRC."
For more information, please visit
http://www.guardian.co.uk/business/2010/[...]rlines-remote-scottish-islands
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