Loganair report £1m profit despite aviation challenges
Loganair, has reported a pre-tax profit of £1.01m for its first full year of operation as an independent regional airline, despite challenges affecting the aviation industry.
The company also experienced a record turnover of £119.85m, up 8.3 per cent on the previous year’s figure of £110.65m.
The pre-tax profit is reported after non-recurring costs of £3.07m related to the introduction of Embraer jet aircraft to the fleet and the associated significant expansion of Loganair’s fleet to 43 aircraft during the first quarter of this year. With this expansion, Loganair has now become the UK’s fifth largest airline measured by number of flights operated.
Loganair has welcomed this return to “the black” after loss in 2017/18. The company have pinned these previous difficulties on the break-up of its franchise agreement with Flybe, and subsequent competition from its former partner.
In October 2018, Loganair’s progress saw it win regional aviation’s highest accolade — the European Regional Airline Association’s award for Airline of the Year, voted for by a panel of industry experts. Operating from its Glasgow Airport headquarters and with 10 further operating bases in Scotland and England, Loganair now has 840 staff — its largest ever complement.
Managing director Jonathan Hinkles said: “We have every reason to be proud of our achievements in the last year, growing our routes in the UK and Europe, expanding staff numbers and expanding our fleet.”
“In addition to new scheduled routes during the year, we also won a new contract to provide services for British Airways’ CityFlyer subsidiary, took over the operation of a corporate shuttle service for a major aircraft manufacturer linking its production sites and won a competitive tender to provide essential air services between the City of Derry and London.”
“We have also expanded our codeshare and interline agreements with such major international airlines as British Airways, Turkish Airways, Emirates Airline, KLM, Air France and Qatar Airways, bringing benefits to customers who can fly with a single ticket between our destinations in the Highlands & Islands and hundreds of major cities worldwide.”
“But most importantly of all, we have done this while looking after our customers — as can be seen by our second top places in both the UK domestic airline punctuality league table and UK airline customer review ratings.”
Mr Hinkles sounded notes of caution on three challenges affecting the aviation industry. According to the managing director, one of these challenges is “aggressive” no-win no-fee agencies trying to extend eligibility of EU261 customer compensation claims for flight delays and cancellations to those affected by adverse weather. Another, Mr Hinkles said, is the five-fold rise in cost of EU Emissions Trading Carbon Permits, which he believes is effectively a tax on aviation fuel, adding over £1 million to Loganair customers’ ticket prices each year on top of the highest air travel tax in Europe (Air Passenger Duty). The final obstacle the industry is facting, according to Mr Hinkles, is an industry-wide shortage of pilots.
Despite these challenges, Loganair has pressed forward with expansion plans in the early part of the new financial year, launching new services to London Southend Airport from Aberdeen, Glasgow and Stornoway and the first commercial air services from Carlisle Lake District Airport in over 25 years.