finance

Loganair reports £12.7 million loss



Loganair has reported a loss before tax of £12.7m, of which nearly £3m was attributable to the onset of the pandemic and the associated re-valuation of fuel and currency contracts.

The airline’s audited accounts for the year to 31 March 2020 – taking in the first month that coronavirus really hit the UK.

The reported loss also reflects the progress on Loganair’s fleet renewal programme during the year – leading to a charge of £7.5m associated with the retirement of older aircraft – and a loss of £2.1m arising from the industrial dispute by air traffic controllers at Highlands and Islands Airports (HIAL), which ran through most of the year.

Turnover grew from £120m to £169m during the year, as Loganair phased out its older Saab 2000 and Dornier 328 turboprops and introduced next-generation ATR turboprop aircraft to its fleet.

It now has seven of the aircraft in service, delivering lower environmental emissions, improved capacity and better operating economics throughout its route network.

The impact of the pandemic on the aviation sector as a whole has been “very significant”, according to a statement, Loganair by no means exempt from these challenges.

However, for the financial year now drawing to a close, Loganair expects to report a significantly narrowed losses, due to new income from contract and charter flying and “a rigorous focus on costs”, including the use of the furlough scheme during the downturn in demand.

Loganair is now the UK’s largest regional airline, with more than 70 domestic routes, plus services into Ireland, Norway and Denmark.

The airline stepped in following the failure of Flybe in March 2020 to maintain the Isle of Man’s lifeline air services; has converted aircraft to fly Covid-19 patients for the Scottish Ambulance Service; has maintained regular passenger and mail services throughout the Highlands and Islands; and has continuously flown scheduled and charter services at Aberdeen to support essential travel in the oil and gas industry.

“The last 12 months have placed an extraordinary burden on everyone, yet we are incredibly proud of the efforts which Loganair’s team has made to continue delivering for the communities that we serve,” said chief executive Jonathan Hinkles.

“We’ve flown record volumes of mail and cargo through our route network as well, highlighting the increased capacity of our new ATR72 freighter aircraft.”

Loganair was an early adopter of the Coronavirus Large Business Interruption Loan Scheme in July 2020.

The airline agreed a £25m loan facility with Clydesdale Bank and owners Stephen and Peter Bond simultaneously agreed a package of support amounting to £11m over two years.

Loganair continues today to trade in line with the cautious forecasts drawn up at the time of the refinancing.

“This comprehensive re-financing enables Loganair to look to the future with confidence,” said Hinkles. “As the UK’s vaccine programme continues apace, we are already seeing modest signs of a recovery in bookings on domestic routes for the year ahead.

“Although we have a long way ahead of us on the path to recovery, the support of our team, our shareholders and our lenders is truly appreciated and integral to our future success.”

Loganair will resume services on several routes during April, with others following through May and June.

These will include the re-launch of services on several former Flybe routes linking Scotland and the north of England with Southampton, Exeter and Newquay.

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