UK regional airline Loganair is reported to be on the verge of reaching out for government support as the slump in travel demand eats into its available cash. The carrier is reducing services from today for at least a month to just a ‘skeleton schedule’, but has highlighted the critical nature of its connectivity for rural communities, such as those living on the Scottish islands.
Asking for financial aid this week
Scottish based Loganair is planning to request financial support from the UK government, it has been revealed today. CEO of the airline, Jonathan Hinkles appeared on the BBC Today Program this morning, where he explained that although the Department for Transport and Civil Aviation Authority have provided good support for the UK’s airlines, the measures currently in place would not prevent the airline from collapse.
As reported by ITV News, he said,
“The Covid-19 pandemic has had an enormous effect on all UK airlines.
“The Government has made it clear that it is open to requests for support from individual airlines and whilst Loganair has not yet taken up this invite, we expect to join other UK airlines in doing so in the coming days.
“As a provider of lifeline air services, Loganair is unlike other many airlines in that we are continuing to fly the routes on which our customers depend.
“It’s critical that we do so, and we believe we are well placed to be able to maintain those services throughout the current crisis.”
No blanket bailout
UK Chancellor Rishi Sunak said last week that there would be no blanket bailout for its airlines. However, he did say that the government would be “prepared to enter negotiations with individual companies seeking bespoke support as a last resort, having exhausted other options.”
The government’s statement suggested that airlines should explore all other options prior to asking for support. Loganair has reportedly been working closely with its stakeholders and suppliers to minimize costs, but that this was unlikely to be sufficient to ensure its long term survival. He told the BBC, as reported by Business Traveler,
“This isn’t about deferring payments; it’s about getting rid of payments. What no airline can afford to do is rack up huge debts for the future that it’s going to have to service, because we are looking at a position even after this where the demand environment is going to be depressed for quite some time.”
Loganair provides some of the most critical services to remote communities, including to the Scottish islands. As well as moving people, it is responsible for deliveries of goods and mail to the communities it serves, including medical supplies and pharmaceutical goods.
After the collapse of Flybe earlier this year, Loganair announced it would take over some of its routes, giving hope to rural communities that connectivity would be maintained. However, from today going forwards, Loganair will only be operating what it calls a ‘skeleton scheduled of essential air services’ until at least April 20th.
If Loganair does reach out to the government for financial support, it will join Virgin Atlantic, who was reported last week to be eyeing a bailout. The government previously said it planned to prioritize regional airlines with any rescue funding, so there are high hopes that the outcome Loganair could be positive.
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