Highland Airways enters administration

| March 25, 2010 | 0 Comments

Scottish airline, Highland Airways, has gone into voluntary administration putting 100 jobs at risk.

The company, which is based in Inverness and also has routes to Wales, called in administrators last night, PricewaterhouseCoopers (PwC), to take over the running of the business.

The Civil Aviation Authority (CAA) said operations had been suspended “with immediate effect”.

The airline, which was established in 1991 as Air Alba, has suffered amid difficult trading but the severe wintry weather at the start of the year led to cancelled flights and worsening debts.

Bruce Cartwright, joint administrator and head of business recovery services at PwC, said: “The company had encountered trading difficulties including the loss of certain contracts.

“As a result they were in discussion with a number of parties over a period of time with a view to developing a new and viable operating model. The directors have now concluded that the option of maintaining operations while introducing a new investor is no longer feasible.

“It is inevitable that there will be a substantial number of redundancies but we will endeavour where feasible to assist the work force in securing employment with the new service providers.”

The Scottish Government described the collapse of the airline as a great disappointment and comes just a few months after Edinburgh-based Flyglobespan, which was Scotland’s biggest airline, was placed into administration.

The global economic downturn had a devastating impact on the airline industry, which led to a slump in demand as fewer people travelled by air.

Many airlines went bust during the downturn, not just due to a fall in demand but also as a result of higher fuel prices.

However, the International Air Transport Association (IATA) recently said the global airline industry is improving, with both passenger and freight numbers expected to grow this year.

In January, the industry body said 2009 saw the biggest decline in air passenger traffic since the aftermath of World War II.

In related news today, Jarvis, the railway maintenance company, entered administration after being refused further support by its lenders.

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