Flybe have pulled out of the Sumburgh route effective from 8th January next year.
The decision to pull out comes just weeks after Loganair managing director Jonathan Hinkles warned that the route was not big enough for two providers.
Flybe said that after a detailed review into the Sumburgh services operated by Eastern Airways on their behalf the companies made a joint decision to end all flights to and from Shetland.
Disappointing passenger numbers and fares tumbling by between 20 and 40 per cent have been connected to the decision. Loganair said that competition had driven fares down to unsustainable levels and caused heavy losses for both airlines.
All customers with existing bookings for travel after this date will be offered a full refund or could alternatively be re-booked on alternate flights with Loganair as close to their original travel time as possible.
Flybe will be contacting customers affected directly from Monday 11th December.
Ryan Thomson, chairman of the SIC’s environment and transport committee, said: “[It’s] absolutely no surprise whatsoever given the fact that everything, all the evidence and the statistics and figures, we had at the SIC suggested that the route itself was not big enough to support two operators.
“So although there’s no surprise at Flybe’s decision to pull out, perhaps a little surprising that they have only given it four months.”
He added: “At the end of the day Flybe said they would commit to this route. They clearly were not – in any way, shape or form – given that they have given this only four months. They could not possibly make any sort of decision based on four months of the year. I would have thought they would have needed to give it a full calendar year.”
Isles MSP Tavish Scott added: “I spoke to Flybe’s Operations Manager today. I am disappointed that the airline has had to withdraw as they brought price competition to the benefit of islanders. Flybe have been commendably honest about their operational performance which has simply not been up to the standard they or passengers would want.
“I’m afraid that while we want competition to bring down fares, the challenge for both Flybe and Loganair was carrying enough passengers to remain economic, particularly through the winter.
“In many ways today is very disappointing but not totally surprising.
Loganair’s Mr Hinkles said: “Today’s announcement by our rival isn’t about a victory for Loganair, it’s about a victory for common sense.”
He added that Loganair remained committed to serving Shetland and was looking at ways maintain affordable fares.
In an interview with The Shetland Times, Ronnie Matheson, Flybe’s interim chief commercial officer, denied being embarrassed by the news.
“To start with, our plan was to come in and offer a real alternative for Shetland and the other islands with a view to trying to lower the pricing down, which we achieved.
“The problem we have is that we needed to offer that operationally, and quite frankly we didn’t. We came in, we tried a new product, we gave it our best shot – but it did not deliver.
We came in, we tried a new product, we gave it our best shot – but it did not deliver. RONNIE MATHESON
“We’ve lost the customer confidence as a result.”
He said Flybe had listened to customers in Shetland, but the public perception was that the airline was not operating its services well.
“Rather than continuing to persevere with trying to rebuild the confidence, I think we’ve lost that public confidence. Rather than trying to regain that, we had no real choice but to remove ourselves from the market.”
He said assessments had been carried out of the market before Flybe committed to offering its services in Shetland. However, he insisted there was still room for a second carrier in the isles.
“We do believe there was room for two carriers, but we have got it wrong in terms of the operational performance. Without that operational performance being as strong as it should be, we ultimately lost the consumer confidence.
“I do think we understood what we were getting into. It’s just that we, as a partnership, have not delivered.”
He admitted there had been reliability problems and technical defects, which contributed to the poor performance the airline had.
Asked whether he thought the decision to use one Eastern Airways jet for all the routes was flawed, he said a second aircraft had been added more recently.
“I think we tried as much as we could to support that.”
The news means any moves to offer a patient travel service will not go ahead.
Mr Matheson said it became clear NHS Shetland was not using Flybe, because it had a deal in place with Loganair.
“I think that’s another small factor in our forward booking performance, as well. We were expecting to see a bit more of a build up in passenger booking profile. Clearly we’re not seeing that from NHS Shetland. While that is not the defining element in that decision, it certainly played a part in that decision.”
Asked what lessons would be learned he said: “Operationally, we have to get it right. I think the lesson learned by the Shetland public will be around what advantages competitive fares can bring. I do hope that gives the Shetland public a flavour of what could be in the islands. From our own point of view, we’ve taken the decision to remove the flying. We have to go back and do an internal review on that.”
He offered a “sincere apology” to Flybe customers. “We’re extremely sorry we have had to take this decision to remove our flying from 8th January. However, our customer care team will be in touch with every single affected passenger. They will be contacted next week with the offer of a refund, or the chance to be rebooked onto Loganair – of course, at no expense to the customer at all.”
The decision comes not long after Flybe’s “community hero” – Sharon Deyell – saw a jet with her name on it touch down on the runway at Sumburgh. The Bixter fundraiser was chosen as part of an initiative run by Flybe.
Mr Matheson said she had been contacted and advised of the news.
“She understood and took the news as well as can be expected. The aircraft will continue to fly under name, even though it won’t be operating in Shetland.”
In a statement, he added: “Serving Scotland is one of the most important parts of the Flybe business and we are extremely disappointed to have had to take this decision.
“We entered the market with a strong commitment to offer a faster more comfortable service with more choice, which delivered on the long overdue lowering of fares that islanders have been calling for, for so many, many years.”
Mr Matheson added: “After looking at all factors, having driven down prices on the three Shetland routes, passenger numbers have been disappointing.”
Since announcing their Shetland service Flybe has flown routes to Aberdeen, Edinburgh and Glasgow in direct competition with Loganair.
The airline also confirmed that it remains committed to its recently announced sponsorship of the Cancer Research UK Relay for Life.