An airline has told how Brexit red-tape is bringing “unwelcome cost” and exacerbating aircraft overhaul and maintenance supply chain pressures.
While Loganair has almost doubled its profit and posted record turnover last year, it also faced challenges related to Brexit bureaucracy.
The Glasgow-based company, which is the UK’s largest regional flyer, grew its turnover by 53% to March 2023 to reach a new record of £247.3 million from £161.7m the previous year.
It posted a profit before tax of £10.9m, against £4.98m the previous year, when the business was still recovering from the pandemic. It has seen change at the top, with former Wizz Air and easyJet executive Luke Farajallah appointed as chief executive of Loganair following the sudden departure of Jonathan Hinkles.
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Loganair said: “The rapid return of demand for air travel led to an unprecedented and much-publicised situation at many UK airports during the early part of the year as facilities and staffing levels struggled to keep pace with that resurgent demand.
“Loganair was not immune from these challenges, and although we have been able to comprehensively address the staffing issues, the entire industry continues to face significant challenges with global supply chain shortages affecting availability and overhaul times for aircraft, spare parts and key components such as engines and landing gears.”
The firm added: “These issues appear set to continue in the near-term future. In the UK’s case, the challenges have been exacerbated by new border import and Civil Aviation Authority certification requirements following Brexit and the UK’s consequent departure from the EASA common European aviation system.
“This has added unwelcome cost, time and complexity to our engineering operations and continues to adversely affect the service that we deliver to our customers today.”
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It also said: “The financial year to March 31, 2023 represented a ‘return to near-normal’ for the airline industry following the effects of the Covid-19 pandemic, albeit a year certainly not devoid of challenges for other reasons – mostly related to the aftermath of the pandemic.
“Loganair’s turnover exceeded pre-pandemic levels, growing by 53% to reach a new record of £247.3m (2022: £161.7m). At a time when many other airlines continued to record losses, Loganair’s highly diversified business model enabled us to report a profit before tax of £11m, and we completed the repayment in full of our Covid-19 financing facilities some nine months ahead of schedule.
“This positive trading has enabled the start of a repair to the company balance sheet following two very challenging years of trading.”
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Mr Farajallah said: “It’s encouraging to see we achieved further strong growth in our financial accounts to March 2023, ensuring we can continue to operate lifeline services sustainably and on a year-round basis.
“Whilst the result to the end of March 2023 looks encouraging, it will not be lost on anyone that the current financial year, that will finish at the end of this month, has been one of fleet transformation, operational challenge and inflationary pressures - the latter of which is affecting businesses across Scotland and the UK. We are absolutely committed to building resilience and enhancing our performance for our customers, meaning our future results will reflect the significant investment being made.”
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