Ocean Kinetics - The Engineering Experts

Campaigners reject airline’s ‘no subsidy’ claim

LOGANAIR has been accused of “pulling the wool over our eyes” by denying that it receives a subsidy to operate flights to Shetland and other Scottish islands.

A social media campaign protesting against high flight prices sprung up over the weekend, and its Facebook page has now built up nearly 12,000 followers.

Asked to respond to criticism from hundreds of islanders, Loganair yesterday issued a statement asserting that it “operates flights from Shetland, Orkney, and the Western Isles at their own commercial risk without any government subsidy”.

But isles MSP Tavish Scott and others say it is misleading to suggest that the Air Discount Scheme (ADS), which provides a 40 per cent discount for registered island residents, is not a subsidy.

Meanwhile, NHS Shetland has provided figures showing that more than four per cent of its annual budget – some £2.3 million a year – is spent on buying medical flights from Loganair, which made a £6 million profit last year.

Transport Scotland confirmed on Tuesday that ADS cost the taxpayer over £6 million in 2014/15. In February it was announced that the scheme has been extended until 31 March 2019.

One of Loganair's Saab 340 aircraft.

A spokesman said: “All air services to the islands, excluding the Public Service Obligation (PSO) routes, are operated on a commercial basis, therefore the issue of setting fares is one for individual companies to consider.

“The Scottish Government recognises the importance of air services in the Highlands and Islands and is committed to continuing ADS, which provides a 40 per cent subsidy for eligible passengers.”

The PSO routes, which Loganair operates on behalf of the Holyrood government, are from Glasgow to Campbeltown, Tiree and Barra.

Scott Preston, the man behind the campaign, said the airline’s “generic response addresses none of the real issues which have been raised by those who have posted to the page”.

“They are operating as if this campaign does not exist,” he said. “Loganair claims to be ‘like all commercial transport providers’, but they cater almost exclusively to remote islands who rely on their service. Those communities need a strategy that works for them.

“They are pulling the wool over our eyes by denying that they receive a subsidy. Every time you book a flight through the ADS, the Scottish Government has to pay Loganair. Were it not for the ADS, passenger numbers would collapse because the cost is simply too high.” 

A Loganair spokesman said ADS was a benefit “paid on behalf of the eligible passenger” and “in terms of practicality, the passenger discount is paid direct to Loganair for ease of administration”.

MSP Scott said it was right that the airline receives government support through ADS which “cuts the very high fares by 40 per cent”. 

“The airline also uses airports such as Sumburgh and Kirkwall that are state owned and state subsidised. so they receive support here too. This financial help is available to any airline.

“Instead of putting up smoke, perhaps the airline should concentrate on addressing why so many islanders think their fares are way too high. Lower fares and more reliable planes would be good news for everyone.”

Northern Isles MP Alistair Carmichael said the response to the campaign “merely reflects a growing concern… not just about price but also about reliability and timetabling”.

“Obviously Loganair and Flybe are private companies, but they would do well to listen to the communities that they serve,” he said.

Carmichael added that the introduction of ADS when Scott was transport minister in the Labour-Liberal Democrat coalition made “an enormous difference… and it remains vitally important still, despite the fact that the subsequent SNP government has restricted its scope”.

ADS no longer applies to businesses and organisations, as a result of an SNP policy change, meaning – for instance – that NHS Shetland is now spending upwards of £2 million a year on flights for patients and accompanying staff.

Scott Preston, who started the petition, with his wife Phoebe last year. Photo: Hans Marter/Shetnews

In 2013/14 the health board spent £1.94 million on flights, rising to £2.33 million in 2014/15.  That amounts to over four per cent of NHS Shetland’s entire annual budget.

Carmichael said: “There needs to be better accountability for the spending of that public money and I think it does give the Scottish transport minister a direct locus in influencing what is otherwise a commercial decision for a private company.”

The local Labour party branch has endorsed the campaign for lower airfares, saying that in the past year the “already expensive” cost had “become indefensible, making travel impossible to afford, even for families on moderate incomes”.

Spokesman Gordon Thomson said the “lack of clarity and accountability that conceals the policy Loganair is operating in terms of fares” was unacceptable.

He also called on the transport minister to “fulfil his responsibilities in this matter”. 

Thomson added: “The suspicion that isles consumers are being ripped off will only be cleared when he recognises that we, the people of Shetland, have some rights in the situation, and he takes action.”

Labour’s Highlands and Islands MSP David Stewart, a Labour member, has also given his backing.

“I cannot understand how the flight operators can still charge so much as they do for flights to and from our islands,” he said. “It is a sad day when it is cheaper to visit Europe than our own islands and clearly the balance has to be realigned.”