HIAL’s annual report for 2021/2022

We have published our annual reports for 2021/2022 – a period which saw the airline industry beginning to emerge from the Covid-19 pandemic that had curtailed travel for the previous two years.

Passenger numbers across the Group increased by 162% and aircraft movements increased by 62% as compared to 2020/21, which was attributable to the easing of travel restrictions imposed as a result of the pandemic. Passenger numbers reached 61% of pre-pandemic (2019/20) levels at the end of the reporting year.

Public subsidies received for the year ended 31 March 2022 amounted to £76million (2021: £56.8million. This comprised revenue of £39.8million (2021: £36.6) and capital of £36.2 (2021: £20.2million).  Capital loan funding amounted to £1.3million  (2021: £3.5million). HIAL also received £59,000 for furlough arrangements under the Coronavirus Job Retention Scheme.

During 2021/22 we invested over £36million in key capital projects across our 11 airports and head office at Inverness Airport.  These ranged from major runway resurfacing projects to the introduction of new systems to support Finance, HR, and operational functions.

We continue to decarbonise our operations with all electricity now purchased under the Renewable Energy Guarantees of Origin (REGO) scheme and most of our lighting replaced with energy efficient lights across the estate. Solar powered boarding ramps now provide an environmentally friendly solution to assist passengers on and off aircraft at all HIAL airports.

Another highlight from the year was the successful delivery of Phase 1 of the Sustainable Aviation Test Environment (SATE) and associated infrastructure at Kirkwall Airport.  This included the first hybrid electric flights by Ampaire, crossing the Pentland Firth from Kirkwall Airport to Wick John O’Groats Airport in August 2021.

We are currently working with partners to deliver Phase 2 of SATE.  While SATE facilities are based at Kirkwall Airport, Phase 2 involves plans to work with other Highlands and Islands communities and will match the new technology with practical use cases to benefit communities in the area.

We continued our stakeholder engagement programme, which was cited as an example of best practice by a local council. We also undertook a more structured public affairs engagement programme with politicians which has proved constructive.

We will face significant challenges as the organisation adapts to the current unprecedented external financial pressures.  The Scottish Government published its Resource Spending Review on 31 May 2022.  This sets out the high-level parameters for resource spend for future Scottish budgets up to 2026-27. Indicative budgets show a decrease in the available funding for HIAL over the next three to four years, presenting a significant future funding challenge. The pressure this creates for the company is further compounded by increasing inflation and rising costs.

The Board is currently considering several options to help address the current fiscal position and decided that one of the options was to scale back air traffic modernisation plans for the duration of the strategic spending review.

HIAL chair Lorna Jack, said: “The 12 months to March 2022 brought a mixture of both optimism and challenge for the organisation as the Covid rules and restrictions that controlled the country for so long were lifted. This allowed HIAL to refocus on its strategic plans and get back to providing business as usual airport services very quickly.

“Recovery will take some time and we continue to do all we can to support our customers and partners as we work together to build back confidence in air travel.

“As with every other organisation, HIAL must seek to optimise its earned income, reappraise priorities and spending options, and make challenging decisions based on the extraordinary circumstances we are all facing, as economic pressures impact our day-to-day activities and our future plans.”

Managing director Inglis Lyon, said: “Based on the devastating impact of Covid-19 on passenger numbers during 2020/21, we set a cautious budget target of reaching 25% of pre-Covid passenger levels as an airport group by 31 March 2022. I am pleased that the vaccine roll out and strong uptake contributed to passenger numbers exceeding expectations, and we reached 61% of 2019/20 levels at the end of the reporting year.

“We have learned from the new models of working that were introduced during the pandemic such as remote and hybrid working, and we believe they will have longer term benefits for both our colleagues and the company.”

“HIAL will continue to work in partnership with Transport Scotland, our airline operators and local communities to ensure the long-term sustainability of aviation connectivity for the Highlands and Islands.”

HIAL Annual Report and Accounts - 2021 - 2022

HIAL An Aithisg Bhliadhnail is Cunntasan - 2021-2022

Published: 21st December 2022