Loganair-2
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Loganair future
Ministers call in PwC for Loganair funding talks
Shouldn't ministers be knocking on the Bonds doors first?
Shouldn't ministers be knocking on the Bonds doors first?
Join Date: May 2011
Location: IOM
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Ministers call in PwC for Loganair funding talks
Shouldn't ministers be knocking on the Bonds doors first?
Shouldn't ministers be knocking on the Bonds doors first?
Are the owners of Loganair willing to inject money into the airline (or provide guarantees to any lender) ? Alternatively, have the owners of Loganair decided that the risk of making such a commitment is more than they are willing to accept and prefer instead to write off their existing investments in Loganair and walk away from the whole Scottish airline business ? Earlier this year, Virgin/Stobart knew it wasn't worth putting any more money into Flybe and just walked away
The owners of Loganair may be rich, but they may decide they would like to remain rich instead of spending a big pile of their personal cash on the islands
Loganair doesn't generate big profits even in the best of time. If the owners of Loganair have decided that Loganair will be a major black hole over the next 18 months, then in money terms they are best off walking away from Loganair and putting it into voluntary liquidation.
The owners of Loganair of course aren't answerable to voters and if people on remote islands can't get to the mainland, then it's Nicola Sturgeon's problem.
Bmi Regional was put into voluntary liquidation - so the Loganair owners could be credible if they make a serious threat to close down Loganair
Thus, if Loganair's owners can convince the Scottish Govt that they really would put Loganair into voluntary liquidation because it would be too much of a money pit to keep Loganair going, then the Scottish Govt has to find some money. That Govt cash can of course come with strings attached (e.g. part nationalisation of Loganair) but the onus is very much on Govt - how much taxpayer money will they invest versus how willing they are to make the people on Scottish islands make do with the ferry for the next 18 months instead (with all the associated consequences)
Some people might call this 'game theory'. Others would refer to it as a game of chicken, waiting to see who blinks first
The owners of Loganair may be rich, but they may decide they would like to remain rich instead of spending a big pile of their personal cash on the islands
Loganair doesn't generate big profits even in the best of time. If the owners of Loganair have decided that Loganair will be a major black hole over the next 18 months, then in money terms they are best off walking away from Loganair and putting it into voluntary liquidation.
The owners of Loganair of course aren't answerable to voters and if people on remote islands can't get to the mainland, then it's Nicola Sturgeon's problem.
Bmi Regional was put into voluntary liquidation - so the Loganair owners could be credible if they make a serious threat to close down Loganair
Thus, if Loganair's owners can convince the Scottish Govt that they really would put Loganair into voluntary liquidation because it would be too much of a money pit to keep Loganair going, then the Scottish Govt has to find some money. That Govt cash can of course come with strings attached (e.g. part nationalisation of Loganair) but the onus is very much on Govt - how much taxpayer money will they invest versus how willing they are to make the people on Scottish islands make do with the ferry for the next 18 months instead (with all the associated consequences)
Some people might call this 'game theory'. Others would refer to it as a game of chicken, waiting to see who blinks first
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The only use of Logan is for the Scottish Islands
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But when all this is said and done and you look at LMs purpose in the 'new world', where is it crucial? Thats what all of this will boil down to. Its not an anti-Loganair view, but a general economic view on whats truly crucial for survival when no business is invincible.
If I'm not mistaken, don't the Bonds and their respective holdings hold the rights to most of the assets and spares? You can't get emotional about this. Everyone needs rescuing, but it won't be possible. The owners of Logan have much more to offer before any Gov should. But I also see that they should look to preserve vital Scottish airlinks too.
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You are mistaken. A look at Companies House filings will tell you the correct story.
And what none of us know is what the owners and banks have already offered in relation to the size of the hole before asking for any Government help. There is a presumption in your post that it's nothing, which might or might not be right.
Just out of interest, how do you think IOM will be served in the future?
And what none of us know is what the owners and banks have already offered in relation to the size of the hole before asking for any Government help. There is a presumption in your post that it's nothing, which might or might not be right.
Just out of interest, how do you think IOM will be served in the future?
Saab - you have a very good point. I was trying to say instead that one should not criticise pilots / cabin crew because somebody in a managerial role has (maybe) decided on what might seem to be a high price for carrying cargo.
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David - I'm not in any way criticising any of the LM crew. But the fact they are carrying PPE to Island amongst other things in the COVID effort is not necessarily a blessing, Logan aren't doing that out of the good of their hearts. Its strictly commercial. It could have been loaded on to the Western Atlantic ATP if need be.
I fully expect that Logans owners are going to have to offer something in order to get any deal, but Saab is right that we don't know what that is.
My point is the same - finances aside - you have to consider the exceptional case for any bailout by any Government to keep the airline afloat. It can't and won't be an emotional decision, it'll be economically driven. At least from London. Not necessarily from the Scottish Gov.
With regards to IOM, there are other operators now knocking at the door that were either 1) at the table when BE collapsed but Logan were favoured or 2) weren't at the table previously but now see additional availability of aircraft over the next 18-24months.
The time of panic to recover the former BE routes to/from IOM is over and operators would sooner race for new revenue opportunities post-COVID than shrink their fleets & staff.
I fully expect that Logans owners are going to have to offer something in order to get any deal, but Saab is right that we don't know what that is.
My point is the same - finances aside - you have to consider the exceptional case for any bailout by any Government to keep the airline afloat. It can't and won't be an emotional decision, it'll be economically driven. At least from London. Not necessarily from the Scottish Gov.
With regards to IOM, there are other operators now knocking at the door that were either 1) at the table when BE collapsed but Logan were favoured or 2) weren't at the table previously but now see additional availability of aircraft over the next 18-24months.
The time of panic to recover the former BE routes to/from IOM is over and operators would sooner race for new revenue opportunities post-COVID than shrink their fleets & staff.
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Almost all the routes which LM are still operating are either already PSO funded or would be eligible for this except that in normal times the traffic is sufficient to not require a subsidy. Even the existing PSO bids would have assumed a certain revenue from the farebox.
it seems quite reasonable that in these exceptional times LM should seek a renegotiation. After all the train companies no longer have to deliver their franchise terms, instead deliver an agreed revised service
it seems quite reasonable that in these exceptional times LM should seek a renegotiation. After all the train companies no longer have to deliver their franchise terms, instead deliver an agreed revised service
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The whole discussion of saving airline companies is giving me an itchy-feeling. Why giving a self-declared airline, who is knocking on his chest that they are doing x-amount of flights a week, most of them to destinations i can hardly pronounce the name and doing all kinds of bits and pieces. They already have the PSO contracts so i dont see any need to grant them loans or anything. I dont see any use of it. Where does it stop???? What bothers me a lot, it is my money, tax money, money i had to work for. I believe that airlines should be rescued or bailed out for tactical and strategic reasons, reasons that protect the country and its economy against non-domestic companies or forces. Saving Easyjet, BA all ok for me because they generate a huge economy. But plz not saving just any airline. Very soon person A can set up a company, starting with 100 C150 or Pa28, claiming doing 1000 flights between X and Y and then asking money to save their operations, whatever that is. On top it will only lead to raising taxes again. I rather see the money invested in a good railway system, traffic infrastructure, NHS or something else that the general public benefits from, but not some Saab/Otter-operations to some hillbilly destinations nobody heard of for a fistful of ppl.
Be sure that the bond brothers are getting more money than they will invest themselves.
The world has to come to a sense now.
Anyway, all the best for the crew. Hard times ahead.
Be sure that the bond brothers are getting more money than they will invest themselves.
The world has to come to a sense now.
Anyway, all the best for the crew. Hard times ahead.
Unfortunately Loganair are in the worst possible position coming out of this shutdown. Flying a fleet of fuel hungry regional jets on many routes with weak and minimal demand is going to hemorrhage cash. They got themselves into a position when inheriting the bmi fleet of Embraers that they had to find work for them all and when you see these jets permanently allocated to short, low level hops around the Scottish islands, it’s just not going to work.
Either the Bonds are chancing their hand for Government bailout or they aren’t willing to put anymore money into the business, which in itself is telling. Either way, the business needs to change dramatically in order to survive. If there is a SG bailout then, the company needs to shed its English regional route commitments and focus on Scottish connectivity.
There’s a rocky road ahead for sure, wishing employees the best.
Either the Bonds are chancing their hand for Government bailout or they aren’t willing to put anymore money into the business, which in itself is telling. Either way, the business needs to change dramatically in order to survive. If there is a SG bailout then, the company needs to shed its English regional route commitments and focus on Scottish connectivity.
There’s a rocky road ahead for sure, wishing employees the best.
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I can’t help but feel pessimistic for the future of Loganair. My gut feeling is that the Bonds will be waiting to see if they get a government bailout. If not, I can see them busting the entire company. They’re rich people, and want to stay rich. They did it with flyBMI. I don’t see why they’d put any more money in.
And like it’s been pointed to above, after this is over can Loganair afford to have it’s jets plodding around with single figure loads? I think that a trimming down of operations back to what it was pre-flyBMI merger (highland and island work), focussing on props and PSO routes would be a realistic best-case scenario. And that’s if they got money from the UK or Scottish governments. The jets were clearly going to get replaced by ATRs anyway, so all this could have done is accelerate the process.
I hope Loganair get a massive bailout, the entire operation is saved, and they can have a crack at the flyBe routes. And I genuinely feel for them, as without this virus the closure of flyBe would have been the making of Loganair. But I can’t see them
getting anywhere near enough to save the entire firm. As someone said above, a government bailout to save a few ancient props, flying single figure loads to Islands that 80% of the population haven’t heard of doesn’t sit too well.
Should Loganair disappear, I feel that Loganair management are trying to pomp up the whole “vital services” thing. People change and adapt very quickly. Look at how much as a country we’ve changed and adapted over the last few weeks. Queueing to get into a supermarket, staying at home. Many people working from home. Extreme life changes, accepted by all. So it would only be a matter of time until the residents of the Scottish Islands change their mindset, and accept that the ferry is the only option to get to and from the Mainland. And Loganair will just be a memory.
And like it’s been pointed to above, after this is over can Loganair afford to have it’s jets plodding around with single figure loads? I think that a trimming down of operations back to what it was pre-flyBMI merger (highland and island work), focussing on props and PSO routes would be a realistic best-case scenario. And that’s if they got money from the UK or Scottish governments. The jets were clearly going to get replaced by ATRs anyway, so all this could have done is accelerate the process.
I hope Loganair get a massive bailout, the entire operation is saved, and they can have a crack at the flyBe routes. And I genuinely feel for them, as without this virus the closure of flyBe would have been the making of Loganair. But I can’t see them
getting anywhere near enough to save the entire firm. As someone said above, a government bailout to save a few ancient props, flying single figure loads to Islands that 80% of the population haven’t heard of doesn’t sit too well.
Should Loganair disappear, I feel that Loganair management are trying to pomp up the whole “vital services” thing. People change and adapt very quickly. Look at how much as a country we’ve changed and adapted over the last few weeks. Queueing to get into a supermarket, staying at home. Many people working from home. Extreme life changes, accepted by all. So it would only be a matter of time until the residents of the Scottish Islands change their mindset, and accept that the ferry is the only option to get to and from the Mainland. And Loganair will just be a memory.
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If you live in Shetland, Loganair are the sole carrier so your alternative is an overnight ferry to Aberdeen. The island communities needs to be protected at all costs.