Over the last few months, Tiree Community Council has received copious amounts of comments and letters from members of the community, concerned about growing fare prices on the Tiree – Glasgow route, introduction of lower weight restrictions and lack of promotional deals available to Tiree customers.
Tiree Community Council have been actively communicating with Loganair representatives to get a response to the above complaints and Roy Bogel has now issued us with an update with regards to the pricing structure:
Thank you for your note. On every Loganair flight throughout our network, pricing relates to the expected levels of demand for the service. We continually adjust pricing in an effort to achieve sustainable route economics.
Although the Tiree service is a PSO, if our revenue falls short of the forecast we have submitted as part of our bid to fly the route over the four-year bid period, it is exclusively Loganair’s issue and we have no recourse to Transport Scotland for any such shortfall. As you may also be aware, the PSO provides for a £1 increase per year in the price of each of the five fare “buckets” we have available. This is wholly insufficient to keep pace with increases like Glasgow Airport and HIAL fees and charges, increases in maintenance costs on the Twin Otter aircraft and ground handling costs, before we even get to considering any cost of living increases for our own employees.
The increase in landing and per-passenger charges this year at Glasgow and Tiree airports amount to £1.43 per passenger before any other issues come into the equation. The result of this is that we are selling slightly fewer seats at the two lowest fares this summer than we did last year. Frankly, to cover the costs of the provision of the service, we can’t avoid it; and it is not something for which we should apologise.
With a limited increase of £1 per fare per year, it’s impossible to keep pace with the inflation of airport maintenance and ground handling costs that are an unavoidable consequence of providing the service. As already mentioned, airport charges amount to a £1.43 increase and the sum of the other costs is broadly similar. The PSO only regulates the maximum fare that can be charged, and it does not oblige any operator to offer a lower fare, let alone the range of lower fares that Loganair continues to provide.
To put this into context, we see a position where average fares paid by customers are around £3 higher than last year as a result of the changes – i.e. recovery of the extra costs but not a penny more. One could be forgiven for thinking that this had morphed into the Great Plane Robbery given the level of contention, but an average increase of £3 is the reality of what the change amounts to. We have kept a number of the cheaper fares available but the seats at those fares have now sold out for the summer ahead, and those seats remaining are at higher prices (but still well within the maximum permitted under the PSO).
I’d like to reiterate that the Saturday night stay requirements have not changed and have been in place on the lower fares for over 25 years, based on our archive of Loganair historic pricing information. It is not, contrary to opinion, a new or indeed recent change and it may well date back to policies in place well before 1992. It’s necessary to keep pace with the increases in cost of provision of the service and I can assure you that we’re only doing what we see as absolutely essential. Indeed, if we over-recover (and we’re not doing!) then any excess generated by Loganair is passed straight back to Transport Scotland under the PSO mechanism, so we have no incentive nor motivation to increase fares unduly as we stand to gain no benefit – and plenty of adverse comment – from doing so.
We remain firmly committed to providing the very best value that we can and firmly believe that we’re doing so this year.
To sum up the letter, Loganair have failed to acknowledge any sympathy towards increased fare prices and have explained that they are operating within their current PSO agreement.
The letter confirms that all cheaper fare brackets have now sold out for the summer ahead, suggesting to us that there are very limited ‘just fly’ tickets allocated to each flight.
Tiree Community Council is currently undertaking its handover period with the new Tiree Community Councillors and it is understood that the PSO document is due to be confirmed later on this year.
TCC will work on ensuring the next PSO agreement is more variable for the Tiree community and includes stipulations such that will address the current issues.