Highlands and Islands Airports Limited today welcomed the announcement of a Scottish Executive initiative aimed at reducing the cost of air travel within Scotland for residents of the region’s remotest communities.

In a UK first, the devolved Scottish Government plans to employ the Aid of Social Character scheme. This allows public sector support to reduce air fares in remote and peripheral regions on approval from the European Commission, improving access for remote communities.

Under the ground breaking scheme, residents of Shetland, Orkney, Western Isles, Islay, Jura and Caithness will be eligible for an estimated 40 per cent discount on trips to Inverness, Glasgow, Edinburgh and Aberdeen.

These innovative proposals are a crucial step in delivering on the commitment made by the First Minster, Jack McConnell in 2002. They will stimulate the market and open up competition - boosting the capacity, frequency and number of air routes available in these areas.

An annual budget of £11.2 million has been allocated to deliver the scheme over the next two years (2006/07 and 2007/08).

Minister for Transport Tavish Scott said: “Air fares from the remoter parts of the Highlands and Islands to Scotland's key population centres are unacceptably high, creating a barrier to social inclusion, accessibility and economic growth. The Partnership Agreement saw a commitment to address this.

“We hope to have the scheme in place before the summer to help deliver affordable air fares to Scotland's most peripheral communities. We will be able to confirm the start date once the European Commission has agreed our proposal. Similar schemes are in place across Europe and initial discussions with the Commission have been positive.”

Inglis Lyon, HIAL’s managing director said: “This scheme will make air travel more accessible to residents in Scotland’s remotest communities and should increase passenger numbers on qualifying routes from our airports.

“I have no doubt that it will be widely welcomed by stakeholders in the region who wish to see connectivity strengthened due to its vital economic and social role in the Highlands and Islands.

“The critical factor is that it will ensure that the region’s air network continues to benefit from market flexibility and commercial development while making air travel cheaper for those who rely on it most. Working with the market has delivered major improvements to air travel in the region in recent years and we were very keen to see this market led approach continue,” said Mr Lyon.

HIAL’s 10 airports handled 1,015,657 passengers in 2004/05 and total passenger numbers are up by 12.4% in the first 10 months of the current year to end of January 2006.