§ Mr. Buchanasked the Secretary of State for Scotland whether he will give financial 6W support to loss-making air services in the Highlands and Islands as recommended by the Civil Aviation Authority.
§ Mr. William RossIn consultation with my right hon. Friend the Secretary of State for Trade I have given careful consideration to this aspect of the authority's report on air transport in the Highlands and Islands. We accept the authority's conclusion that some air services in the region which are essential to the life of remote communities show little or no prospect of becoming viable. In general we agree that my Department should give some financial support to such services.
Scheduled operations are currently carried out by Scottish Airways and Logan-air, and in view of the excellent record of both companies my right hon. Friend and and I would wish to see them remain the principal carriers in the region. My right hon. Friend will, subject to parliamentary approval, and after consultation with the CAA, give appropriate guidance to the authority in due course.
Since the authority reported, Scottish Airways, as a result of a rationalisation of their aircraft fleet, have withdrawn from the routes to Tiree and Barra and these now form part of the Loganair network. It is intended that the services provided by Scottish Airways in the Highlands and islands should as a whole become viable in the longer term. Traffic growth associated with North Sea oil activities will assist to this end. We do not, therefore propose that Scottish Airways' operations should be subsidised.
Certain of Loganair's routes, in particular those to Tiree and Barra, are clearly going to remain unprofitable for some time. Following an application for financial assistance from Loganair, my officials, with the assistance of the Civil Aviation Authority, are discussing the amount that might be required and the terms and conditions under which it will be paid. Having regard to the company's experience in operating these difficult routes and the need to maintain a certain scale of operation in order to minimise the deficit on the routes in question, I do not propose, for the time being at least, to invite other airlines to submit proposals.
Provision is made in the Scottish Development Agency Bill, which will be published today, for financial support to 7W be made available for air services in the Highlands and Islands.