(Updated 18.00 25th March – letter from Transport Minister to Alan Reid MP- see foot.) Highland Airways, the company also commissioned to operate the Argyll Air Service from Oban Airport to the islands of Coll, Tiree and Colonsay, has lost its prolonged and manful struggle to stay in business. It went into receivership yesterday, after calling in PriceWaterhouseCoopers.
Joint administrators have been appointed – J B Cartwright and GD Frost to manage the affairs, property and business of Highland Airways Limited and of Highland Airways (Inverness) Limited.
The administrators say that, sadly, they have been unable to continue trading the companies. This means that all flights have been cancelled and all aircraft grounded. The Civil Aviation Authority (CAA) says that operations were suspended ‘with immediate effect’.
Most of the company’s 100 staff will lose their jobs.
The CAA says that , while the administrators are reviewing the position and new operators will be sought, it does not expect the company to be in a position to resume services in the near future . It is contacting passengers who were due to travel to advise them to make alternative arrangements.
We understand that Highland Airways was not covered by ATOL protection so people who booked flights directly with the airline would not be covered – except if they paid by Credit Card, in which case they might be covered by the Consumer Credit Act. Anyone who booked a Highland Airways flight through a Travel Agent is advised to contact the agent in question to establish the position.
Jim Mather, Argyll’s MSP,is very concerned at this news and particularly because the grounding of the aircraft leaves all services from today (Thursday 25th March) cancelled.
The company also operate services to and within the Western Isles so alarm at this development will be widespread.
Jim Mather says: ‘We have known for some time that Highland Airways were facing problems and we are sorry to learn that the company has exhausted all options to maintain operations. We are aware of various steps taken in recent weeks by the Minister of Transport to assist the company to maximise its cash flow but sadly it would appear that these proved unsuccessful.
‘This is a particularly difficult time for those who work for and supply the company. My sympathies go out to those whose jobs are under threat and for those who have come to depend upon the service.
‘We are still waiting for confirmation of what arrangements the administrator can make for any other suitably qualified company to meet the service commitments that are presently in suspension. This is seen as a priority by the Scottish Government.
‘My colleague Alasdair Allan, MSP for Western Isles, sought assurances from the First Minister at today’s First Minister’s Questions and he was advised that the Transport Minister is seeking ways to ensure that the existing schedules be reinstated as quickly as possible. He also stated that Skills Development Scotland and other government agencies were already working to provide support and advice to the workforce’.
Also commenting on the news, Highlands and Islands MSP, Jamie McGrigor says: ‘This is very worrying news for those islands which rely on these services.
‘Only a few weeks ago I wrote to the Transport Minister asking for assurances that should Highland Airways be forced into administration he would make provision for the vital lifeline air services to be continued.
‘The First Minister in his reply to the questioner today has said that within a week new operators should be found so I hope his government will stick to this in order to reassure my constituents in the affected island communities’.
Update 18.00 25th March: Alan Reid, Argyll’s MP, was informed earlier today by Transport Minister, Stewart Stevenson, that:
- Highland Airways went into voluntary administration
- The company made every effort to see a buyer who would maintain the vital services the airline provides.
- every effort is being made to bring in other operators quickly to minimise any break in service provision.
- The services to Coll,Colonsay and Tiree are operated under Public Service Obligation (PSO) agreements and subsidised by Argyll and Bute Council.
- The Minister understands that the Council are looking at chartering an aircraft to provide the service in the interim.
- Such a service could be operating next week.
Some well informed sources suggest to me that the demise of this company was inevitable as they had secured contracts at far below the realistic prices tendered by more experienced operators.Proof perhaps that the lowest tender is not always the best value. If that is so Argyll & Bute Council may not find it easy to secure cover for their scheduled flights without paying considerably more than is in their budget for this.
Would this not be an appropriate time for a thorough appraisal of the operation of Oban Airport and its future function. What appeared to be a cash hungry monster in a much more favourable financial environment now appears even more difficult to justify in the present set up.What does it cost the Council to maintain and staff this facility at a time when serious cuts are being applied to other vital front line services affecting the sick and the vulnerable?
Strange to reflect that prior to the massive cash investment from so many agencies this was a busy small airfield with a much higher annual turnover of aircraft movements and twice voted by UK flyers as the best and friendliest small airfield in the UK.
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