Article from BTNews 9 JULY 2018
Loganair in Flybe row
A pre-tax loss of £9m for fiscal 2017-18 after 17 consecutive years of profit was reported by Loganair last week.
The company said the end of its franchise agreement with Flybe had been a “major factor”.
Loganair had warned earlier of an impending loss since the Flybe decision would result in one-off costs including rebranding and creating a new reservations system, booking website and contact centre at Glasgow Airport.
Managing director Jonathan Hinkles said these totalled £2.98m. Delayed code-sharing agreements cost another £2m while competing with Flybe was estimated to have cost £6.8m. Prices on competitive routes “fell to unsustainable levels”.
Chairman David Harrison said: “The fact we forecast last year that we would be loss-making in 2017/18 makes it no less painful. The extent of the loss is a direct result of competition on six of our eight largest routes.
“From the outset, we maintained the markets on these routes were simply not big enough to sustain the level of seat capacity being introduced – this indeed proved to be the case."
Looking ahead, however, Loganair has signed three new interline agreements with more expected and late last month said it was planning to expand to Europe next year with a Glasgow – Brussels route.
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