The successful development of new air services, growth in passenger numbers and ongoing investment in airport infrastructure were highlighted in the annual report and accounts for 2002-2003 published by Highlands and Islands Airports Limited.

The company manages and operates 10 airports in the North and West of Scotland on behalf of the Scottish Ministers at: Barra; Benbecula; Campbeltown; Inverness; Islay; Kirkwall; Stornoway; Sumburgh; Tiree and Wick.

It is responsible for providing airport infrastructure, facilitating lifeline air links, developing new routes and services in conjunction with airlines, and promoting economic sustainability and social inclusion in Scotland’s remoter regions.

The loss for year ending 31 March 2003 was £1,304,000 as compared with a loss of £1,407,000 in the previous year.

The total subsidy from the Scottish Ministers was £24,050,000, which was split £15,845,000 revenue and £8,205,000 capital. This subsidy represented an increase of more than £4 million over the previous year and enabled the company to respond to demand for increased opening hours at its airports and to complete significant capital projects.

Receipts from aircraft traffic and other charges for the year were £9,229,000 which was £166,000 more than the previous year.

Passenger traffic across the 10 airports was up by a net 4% to 864,301 for the year. One of the lowest years on record for offshore activity in the oil and gas industry resulted in a reduction in oil-related traffic at Sumburgh Airport and without that the overall passenger gain would have been 6.5%.

However, there was strong passenger growth at the region’s principal air hub of Inverness of 8% while Kirkwall recorded a 15% increase. Both Stornoway and Islay saw passenger growth of 10%.

Aircraft movements at the 10 airports increased by 1.5% to 76,119 with the largest gains taking place at Kirkwall, Stornoway, Sumburgh and Wick.

Investment in infrastructure and upgrades demanded capital spend of £9.2 million, with the largest project being £2.1 million for resurfacing the main and cross-runway at Islay. Environmental compliance for run-off water at Wick and coastal protection work at Benbecula accounted for more than £1.3 million of further spending.

Commenting on the annual report and accounts, Highlands and Islands Airports’ chairman Sandy Matheson said the company had achieved the successful launch of new routes and services, completed infrastructure development and increased passenger numbers at a difficult time for the aviation industry.

"The past year has seen continuing flux in the aviation industry resulting in a challenging enviroment for airport operators. However, we have achieved successes both in terms of developing new routes and services within the airport network, maintaining and improving infrastructure and further enhancing our partnerships with key stakeholders in the communities we serve," said Mr Matheson.

"Aviation is a vital element of the transport network in the Highlands and Islands and our airports continue to support business, leisure and welfare links that contribute to the social and economic sustainability of the region.

"Partnerships with bodies such as the local authorities and the Highlands and Islands Enterprise network are increasingly important to us and are bringing tangible benefits to the people of the region who are our ultimate customers along with the airlines."

Mr Matheson also highlighted the cordial and constructive relationship the company enjoys with the Scottish Executive, its Ministers and officials.

"We are heartened by the support we receive for our work and the recognition of the important role aviation has played in the development of the communities our airports serve," said Mr Matheson.

"The company continues to evolve and is focused on the needs of its customers, the travelling public and the airlines. I am confident that we will continue to achieve the growth of services at our airports and continue to offer increasing choice and improved connectivity to the region, its businesses and communities."

ENDS