Loganair says it predicts a loss in this financial year after former franchise partner Flybe launched competing routes in Scotland.
A franchise agreement between Loganair and Flybe ended in August, with Flybe announcing a new partnership with Eastern Airways that saw the airlines competing in Shetland the day after their deal ended.
Throughout the second half of 2017, Loganair signed a number of new codeshare agreements with the likes of British Airways and Bmi.
However, Flybe made the decision to cease the three routes from Sumburgh airport from 8 January. Loganair has agreed to accommodate its rival’s forward bookings on the routes, with MD Jonathan Hinkles commenting that the airline had always believed there was “only room in the market” for one carrier.
Yet the airline’s figures for the year to 31 March, 2017 show pre-tax profits fell by 11 per cent to £3 million, citing costs related to re-branding and building a new reservation system and booking site following the ending of its relationship with Flybe.
According to Scotland’s Herald newspaper, Loganair chairman David Harrison said the airline has “taken measures” to build up its profits over time.
As the carrier continues to build its brand identity, it is nearing the completion of a refit of its 12 Saab 340 aircraft.