Loganair saw profits fall by 38% to below £7 million for the year to March 2024 in the face of industry-wide supply chain issues and operational disruption.
Passenger numbers dropped to 1.52 million from 1.54 million in the previous 12 months.
The UK’s largest regional airline has since responded and reported a “dramatic” reduction in delays and cancellations in the current financial year.
The £6.9 million pre-tax profit for the 12 months from April 2023 came as the Scottish airline completed a fleet renewal by retiring its last Saab 340 in January in favour of larger ATR turboprops.
The result “demonstrates the challenges experienced by the airline in 2023, especially in relation to operational performance, as it completed the fleet transition programme,” Loganair said.
The load factor fell from 62.8% to 59.5% year-on-year as “disruption challenges” led to short term cancellations and the need to re-accommodate passengers on other flights.
“The costs associated with this impact was also a key driver in the fall in profits from the prior year,” the airline disclosed.
The figures were bolstered by £4.6 million proceeds from the sale of the Saab 340s, with funds reinvested to support the ongoing fleet of 36 aircraft which operate on more than 60 routes.
Chief executive Luke Farajallah said: “Despite the headwinds caused by supply-chain problems, operational disruption and inflationary pressure in 2023, Loganair generated a healthy return in the financial year ending March 2024.
“This ensures we continue to operate sustainably, that we have the means to continue investment into our fleet and customer experience, and deliver crucial regional and lifeline connectivity to our customers.
“The financial year ending March 2024 was challenging and the results reflect an environment where many, often industry-wide obstacles had to be overcome.
“However, and recognising the need to build on positive historic financial performance, and with the advantage of having now completed our fleet renewal programme, our focus in 2024 has been to improve operational performance, and reduce costs including those associated with flight disruption.”
He added: “I am pleased to report that the business has responded very well to the changes introduced, and that we have seen a dramatic reduction in delays and cancellations and their associated costs. Our focus has also been to improve the customer experience, with upgrades to our aircraft cabins, improvements to the website, and Airport processes.
“Our aim going forward is to build on the positive trends seen in 2024, and to set solid foundations for the next phase of growth for the airline. I am confident that future financial performance will reflect the various changes and interventions being made, and that our investors, employees and customers can look forward to a bright future.”