Loganair will step in and resume a key link between North Ireland and London after the collapse of sister airline flybmi.

The Scottish carrier was yesterday selected as the new operator for a subsidised Public Service Obligation contract to secure the route between City of Derry airport and Stasted.

Loganair also revealed plans for a new daily service to Manchester.

As part of the contract, the airline will begin operating to Stansted from February 27, with two flights each weekday and on Sundays alongside a single Saturday service.

The deal was secured as part of a Derry City and Strabane District Council PSO contract in a competitive tender.

The Manchester connection starts on May 24 using a 49-seat Embraer 145 regional jet with a flight-time of 70 minutes.

The airline already runs flights between Derry and Glasgow five days a week, having taken the route after Ryanair withdrew last year.

Loganair was the first airline to fly commercial services from City of Derry airport in April 1979.

Lead-in fares between Derry and Stansted start at £39.99 with tickets to Manchester priced the same.

Transport secretary Chris Grayling last week said the government would continue to subsidise the route until 2021 – two days before the failure of flybmi.

He said yesterday that said securing Loganair was “testament to the hard work of Derry and Strabane Council, the City of Derry Airport and my department.”

Grayling added: “This route is vital because it strengthens the union, protects choice and boosts trade and travel opportunities , enabling business trips to and from Derry-Londonderry within a day.”

Loganair managing director Jonathan Hinkles said: “We’re extremely pleased to be selected to operate the essential Derry to Stansted air service following completion of a competitive tender process.

“I know the news about flybmi created great uncertainty, so we’re focused on recommencing operations as quickly as possible.

“The route is an important link to London and the south-east with a schedule which has been tailored to the needs of the business community – enabling a full day of work in the capital before an evening flight home. The weekend services will also be attractive to leisure passengers who can chose the length of a short break.”

He added: “Our new Manchester route marks a further expansion of the airline’s destination map from Derry, building our relationship with the airport and providing even more choice to customers. With a robust economy and diverse cultural offering, we’re excited to connect the two cities.”