If there was ever a story which lent itself to a TV drama it is that of Scotland's longest surviving airline, Loganair
If there was ever a story which lent itself to a TV drama it is that of Scotland's longest surviving airline, Loganair.
It has everything. ere is the bravery of the pilots ying in all weather conditions to the Highlands and Islands, especially those involved in its life-saving air ambulance work. Indeed some of them have died in crashes in an industry where there is always inevitably an element of risk.
There are nail-biting moments when the very existence of the airline came under threat because of financial crises, ruthless action by rivals or the foibles of a shareholder who wouldn't sell it to the management team.
And there are bizarre incidents such as when an aircra was ready to take o at Kirkwall on the Orkney Islands but the in exible airport management said it was closing time and it couldn't.
Above all, what makes a good drama are the characters and Loganair chairman Scott Grier really ts the bill as the heroic boss who not only made sure the airline survived but took it to a new level where it now directly employs more people than at any time in its 50-year history.
Grier has captured the turbulent half century of Loganair's history in a new book suitably entitled Loganair: A Scottish Survivor 1962-2012.
In the book Grier describes the origins of the airline, which was founded by civil engineering company boss Willie Logan, who regularly used planes to visit construction sites all over Scotland and across the border.
Logan, who lived in Muir of Ord, had built up a highly successful, family-owned company, Duncan Logan (Contractors) Ltd, with one of its most high profile projects being the Tay Road Bridge at Dundee.
When the air taxi rm he used got into financial difficulties he bought it and changed the name to Loganair. At that stage it owned just one plane - a Piper Aztec based at Renfrew Airport. Within a year it bought another Aztec and a single-engined Piper Tripacer, which was ideal for hiring out to the media for aerial photography.
The company won contracts such as one from the army to take mail and food to a radar station on the remote island of St Kilda.
Ironically, Logan died in an air accident, four years after buying Loganair, in a plane owned by another Scottish based operator, Strathair. His memorial at Dingwall is in the form of two columns and a section of deck of the Tay Road Bridge.
The airline continued to be run by its pipe-smoking chief pilot Duncan McIntosh - or Captain Mac as he was known to most people in the trade. However, it was trading on "wafer thin" margins with 500 of its 1700 ying hours used for ying Duncan Logan staff.
In those days UK aviation was totally regulated and British European Airways and, later, British Airways, held the major route licences. Loganair had been operating a daily newspaper contract between Glasgow and Stornoway since 1964. A key moment in its history came in 1966 when it won the licence to carry 15 passengers a week on its return journey to Glasgow from Stornoway despite strong opposition from British European Airways, who were then operating a daily scheduled passenger service on the route.
It was the first of many battles little Loganair would have against much bigger rivals in the years to come.
In his book Grier says Loganair's love/hate relationship with British Airways was resolved when the giant nally withdrew from its Highlands and Islands routes in 2003 while Loganair continued as a BA franchise partner until 2008.
Today Loganair operates most of its services to the islands under the Flybe banner but still code-sharing with British Airways. e only plane which actually carries the Loganair banner is in the North Isles of Orkney, where it has been operating a hop-on, hop-o service since 1967.
In years gone by the airline's planes have own under a number of other banners but Grier says regardless of how the aircraft is painted as far as the locals are concerned it is still a Loganair aircraft. "We are part of the local fabric I think," he says.
Loganair is based in an unprepossessing concrete building close to the runway at Glasgow Airport. It was built in 1978 on the site of its previous home in an old wooden hut which had been brought from one of Willie Logan's construction sites when it moved from Renfrew to Glasgow in 1966. "When the wide-bodied aircra taxi past I think we are about 50 feet from the wing tip," smiles Grier, as we sit admiring the view.
Next to the HQ is Loganair's ten-year-old maintenance hangar, which replaced the company's earlier World War II hangar.
Just over 200 of Loganair's 453 staff work at Glasgow with the rest spread around Scotland and the UK.
Grier, who has been with Loganair for 36 years, was born in Kilmacolm, Renfrewshire, and went to Greenock High School and Glasgow University, where he graduated in English and History in 1962. When looking for a venue for Loganair's 50th Anniversary Dinner Grier admits he indulged himself a bit by holding it in Glasgow University's Bute Hall where he graduated exactly 50 years ago.
Grier is a chartered accountant having trained with Grahams Rintoul, which is now part of Ernst & Young, before joining Ardrossan Harbour Company which was bought by the Clydeport Authority shortly afterwards. "I was never interested in auditing as a profession. I was always more interested in commerce," he explains.
In 1976 Grier applied for a job with Loganair as financial and commercial manager. e company was then owned by the Royal Bank of Scotland, which had acquired it when it merged with the National Commercial Bank of Scotland (NCBS) in 1969. NCBS had bought it a year earlier from Duncan Logan (Contractors), which was experiencing serious cash ow problems with its project building the Kingston Bridge across the Clyde.
Grier says by 1968 Loganair was a highly respected 'third level' operator of a range of air services in Scotland. ere were real reasons for optimism for the future making it an attractive buy for the bank, which intended to use Loganair's services to get round their 600 branches in Scotland. Sadly Duncan Logan (Contractors) never recovered from its di culties and went into liquidation in 1975.
Grier says he was attracted by the idea of working for Loganair. "It was an attractive job and even then the air industry was known to be fragile but it was an exciting company because it had the Highlands and Islands services and everyone knew that," he tells me.
In 1977 he became the financial director with responsibility for the commercial function. "We had attached a lot of importance to winning new routes over from BEA/British Airways and had some success but not surprisingly these were their small routes which were their heavy loss makers. It turned out they weren't guaranteed profit makers for us either. It was hard work and some of them required - and continue to require - subsidy."
A significant figure at that time was John Burke, who was the deputy chairman of RBS and Loganair's chairman. "He took a paternalistic attitude. He was genuinely interested in aviation and well aware of the social and economic importance of the services we were providing to the Highlands and Islands communities. He carried us through periods when we were seriously loss making towards the end of the 1970s."
In another ironical twist the company got into trouble in the 1970s when it tried to capitalise on the burgeoning North Sea oil and gas business. At first things went well with Loganair winning a contract with Chevron to fly oil workers to Unst on the Shetland Islands using six De Havilland Twin Otters it had acquired for the purpose. Each plane carried between 16 and 18 passengers and when it took the contract, and made the investment, no other plane seemed able to fly into Unst.
Grier has never forgotten the day he was invited to go on a demonstration flight with the oil companies on a 50-seat de Havilland Dash Seven with its short take offand landing capability. "It got in and out of Unst very easily and I thought 'goodness me, here we go'. And sure enough Chevron foreclosed on us.
"That was a critical financial issue for us because we had recently bought the Twin Otters at s500,000 each, which was a big investment, and they were suddenly redundant on three months' notice. We incurred huge losses at the end of the seventies. Without the bank we would not have survived."
Grier took over as managing director of Loganair in January 1983 at a critical time in its history. The Royal Bank of Scotland itself had just narrowly escaped being taken over, firstly by the Hong Kong and Shanghai Bank and later by the Standard Chartered Bank. Pressure was put on the bank to sell Loganair but it had to be turned round first. Grier performed that task successfully. When it was eventually bought by British Midland Airways headed by Michael Bishop - now Baron Glendonbrook - the company was carrying 210,000 passengers on 15 aircraft with turnover of £10m and 220 staff.
It was the start of a rollercoaster relationship between Grier and Bishop, who got on well initially. "I give full credit to Michael Bishop in his early days because he broke the mould and I think he was a tremendous force for good for Scottish aviation in competing with British Airways on the trunk routes from Glasgow and Edinburgh to Heathrow. He was a real thorn in the side of BA and they had to respond positively and improve their own services."
Loganair's scheduled flights to the Highlands and Islands connected wherever possible with the BMA scheduled services at Glasgow and Edinburgh. All went well until 1987 when British Caledonian was merged with British Airways. But BA was prevented by regulators from operating British Caledonian's routes from Glasgow and Edinburgh to Gatwick and Bishop decided Loganair should apply for them. Loganair bought two costly, 101-seat BAE 146 jet aircraftin anticipation of winning the routes.
However, because Loganair was a subsidiary of British Midland Airways, which was operating into Heathrow, the regulators felt it would not provide proper competition to the Heathrow services and the route licences to Gatwick were awarded to Air UK. "That meant we had these two 146 jets and the task for which they had been bought had disappeared at a stroke," says Grier. "That put us under the cosh. As a consequence we got into serious financial difficulties.
"Later there was a reconstruction of the group in 1994 and most of our business and all of our bigger aircraftwere transferred to a sister company in the Isle of Man - Manx Airlines - which became British Regional Airlines. We had just under 200 staff redundancies and many more staffthan that transferred to the Isle of Man - a sad time for everyone."
Grier's first two attempts at a management buyout were blocked by Bishop, who had, according to Grier, "fallen out of love with their Scottish subsidiary". "These failed although we had the funding in place with support from 3i and Bank of Scotland for both attempts. They were as perplexed as we were when the deals didn't go through.
"Then further aircraft and business were transferred to their Isle of Man sister company. We came within a whisker of being absorbed in 1996 and there is no doubt Loganair would have disappeared. By the time we actually did a management buyout the company was tiny."
Grier and his team were left with five eight-seat Britten Norman Islanders and one 18-seat De Havilland Twin Otter. "We had various small contracts but notably we had the Scottish Air Ambulance Service contract," he says. "We were starting out again."
The rebirth of the company has been a remarkable one with only one loss in the last 15 years because of cash ow problems in 2000/2001 when it was acquiring the larger, pressurised Saab 340 aircraft.
There was also a worrying time in 2005 when it became clear the company was not going to be successful in renewing the air ambulance contract which it had held for an incredible 39 years. "Losing the contract was devastating. For 39 years air ambulance ying had been both a huge commitment for the company but also a source of great satisfaction to so many Loganair pilots and staff. That loss was bad for us, psychologically and financially.
"The loss of the ambulance contract meant all our business was scheduled services and, more significantly, it was all within the Scottish Highlands and Islands. We really did have all our eggs in one basket. But we could cope with that because we had built up scheduled services by then."
However, the board knew the business model had to change and the airline needed to diversify. e rst thing it did was extend the coverage of its scheduled services outside the Highlands and Islands and start new routes from Dundee to Birmingham and Belfast. It also launched new routes to the Isle of Man. "We also identified that after several years of very low aviation activity in the North Sea there was suddenly more business and we had to get a bit of that," says Grier. "We worked very hard and got several contracts.
"Even more important was that we acquired two freight aircraft and won three contracts - two at night and one during the day - for Royal Mail. And since then we have got another freight contract for carrying newspapers."
The company has also started a ground handling business in Aberdeen and Sumburgh airports and acquired a small airline many will remember as ScotAirways. ScotAirways was, at one stage, majority owned by Stagecoach founder and chief executive Sir Brian Souter, who later sold it to founders Merlyn and Roy Suckling. It later became Suckling Airways and Loganair bought it in July last year. Cambridge-based Suckling operates six Dornier aircraft , which provide services to other airlines and are chartered out to customers such as English Premier League football clubs.
Suckling's aircraft are faster than the rest of Loganair's fleet and can fly to Europe, which gives the group a much bigger area for its operations. "Our business model is more robust than it ever has been before," says Grier. "We have a mix of business which I think will carry us through."
Grier is also keen to make clear Loganair is not a "subsidy junkie", which is a phrase Ryanair's outspoken chief executive Michael O'Leary has used for describing some of his competitors. "We are fortunately not a competitor of his, of course," laughs fortunately not a competitor of his, of course," laughs Grier.
"In the 1970s, government subsidies were vital to the company's survival and at one stage represented about 16 per cent of turnover. Today subsidy is not critical to the company's survival but vital to safeguard the future of a few lifeline air services - for the provision of services from Glasgow to Campbeltown and to Tiree and Barra.
"We have a contract with the Western Isles Council for an air service between Stornoway and Benbecula and Barra. And we have a contract with the Orkney Islands Council for the North Isles - the internal air services in Orkney. Last year we won the contract for Dublin to Donegal. Quite simply, without subsidy these routes would not survive. Nobody would operate them. ey are very seasonal and very thin but hugely important to the communities.
"Aviation is a fragile business but it is an exciting business. It is also a very gratifying business because Loganair, I think, has been recognised as an airline that has shown huge commitment to the rural communities and the Highlands and Islands over a long period. We came close to extinction several times and we managed to get by but some of it was a close run thing."
Today Grier chairs the company but says he is clever enough to delegate the day-to-day running of the company to its senior management team headed by chief executive David Harrison. "I do love the business and I feel quite t so I am pleased to be continuing. I don't get involved in the day-to-day operation, which can be seriously stressful. But I am very much involved in the strategic direction of the company and I believe the company can still make progress and expand further.
"We have built up a strong balance sheet and are well funded. e aviation landscape in the UK is changing and has been for two or three years now and each time we have managed to bene t from that. We are quite nimble footed. We are financially quite strong to take advantage."
Just the day before I interviewed Grier the airline announced it was starting a new Glasgow to Leeds scheduled service because British Midland Regional was discontinuing it. A few days before that it revealed plans to y from Glasgow to Newquay after the demise of Air South West which used to run the route. Last month it started new services from Norwich to Manchester and Exeter.
However, in a world where nothing is certain Grier will no doubt make sure he has his safety belt fastened as the airline enters its second half century.
Loganair: A Scottish Survivor 1962-2012 is published by Kea Publishing. You can buy a copy via the publisher's website at www.keapublishing.com.