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Transport / Loganair takes significant financial hit from industrial action

Airline also worried about compensation eligibility after passengers on delayed Sumburgh to Glasgow flight awarded money

A Loganair Saab 340 at Sumburgh Airport. Photo: Shetland News

THE FINANCIAL impact of the ongoing air traffic controller industrial action in the Highlands and Islands on Loganair has exceeded £1 million, it is understood.

There have been two days of strikes at Highlands and Islands Airports Ltd (HIAL), including Sumburgh, as well as ‘work to rule’ action, over the last number of months.

Loganair managing director Jonathan Hinkles said the industrial action, which stems from members of the Prospect union wanting pay parity with air traffic controllers at other airports on the UK mainland, has had a “significant impact” on passengers.

“Cancelled hospital appointments, not being able to get travel for funerals,” he said. “All sorts of stuff that you can’t replace.”

But the action is understood to have had a financial impact on Loganair, which flies in the Highlands and Islands and beyond, to the tune of over £1 million.

One of the main reasons behind this is the action short of a strike, which has included air traffic controllers not working beyond airport opening hours.

In the event of delayed flights not being able to land because the airport won’t stay open beyond its scheduled hours, Loganair has to pay for overnight accommodation for passengers as well as meals.

Loganair's Jonathan Hinkles said the airline provides a “very favourable deal” compared to other operators when it comes to taking pets on board. Photo: Shetland NewsLoganair chief executive Jonathan Hinkles.

“We’re heartened to hear there are still open lines of discussion between HIAL and the union, and we remain resolute that there has to be an outcome for this dispute,” Hinkles said.

“It cannot go on for forever and a day. Hopefully these talks will lead somewhere.”

Loganair, meanwhile, reported on Thursday a pre-tax profit of £1.01m for the 2018/19 financial year.

It is a return to a positive financial balance after the airline reported losses as it sought to ‘fly solo’ again amid competition from Flybe in the Highlands and Islands.

Hinkles, however, expressed worry over “aggressive no-win no-fee agencies” that are trying to extend the eligibility of compensation for passengers in the event of weather delays.

The EU compensation scheme has previously only awarded €250 when flights have been delayed or cancelled due to issues that the airline has influence over, like technical problems.

Hinkles revealed that a handful of passengers on a delayed Sumburgh to Glasgow flight last year have been successful in landing the compensation after their case was heard at a small claims court in Liverpool.

He said their flight had only been delayed due to weather reasons.

“That was a Shetland to Glasgow flight last year where weather in Sumburgh was bad,” Hinkles said.

“The aircraft was on time, flew up from Glasgow, wasn’t able to land in Sumburgh despite holding and making a couple of approaches.

“It diverted to Kirkwall, picked up some fuel there, came back to Sumburgh as soon as there was a weather window, landed, and then took off back for Glasgow just over three hours late.

“There’s nothing we could do about that, and the implication of that on air fares going forward would just be huge.”

Hinkles said Loganair has “lost round one” but is appealing the judgement.

The airline boss warned it could set a debilitating precedent, particularly for a company like Loganair which flies in areas often affected by weather.

“The potential impact of that on both the level of services that are provided and the cost of airfares just doesn’t bear thinking about,” Hinkles added.

With the level of compensation generally outstripping the cost of a plane ticket, “it will render some routes unviable” if it became precedent, he warned.

General Election - 12 December 2019