​ADS costs millions extra due to Loganair fare hikes

Figures obtained through a Freedom of Information request and shared with the Gazette show that the cost of the Air Discount Scheme has risen by almost £2.5 million within a year – despite fewer passengers being carried.

The revelations have prompted renewed demands for a full scale review of how Highlands and Islands air services are funded and whether the Loganair monopoly should be challenged.

The Air Discount Scheme, introduced by the Labour-LibDem administration in 2006, gives island residents a 50 per cent percent reduction on basic fares between islands and mainland. The more fares increase, the higher the cost of subsidy.

In 2025-26, the ADS discount cost Scottish taxpayers £15.76 million – up from £13.26 million the previous year while Loganair carried 3000 fewer passengers who benefited from the scheme.

As a result, the per passenger subsidy from the Scottish Government to Loganair rose from £74.33 to £89.35, a 20 per cent increase in a single year. Since 2022-23, the per passenger increase in ADS subsidy has risen by 44 per cent.

According to the Bank of England's inflation calculator, a £62.27 claim in 2022 would have risen through inflation by 16 per cent to £72.02 in March 2026.

However, the ADS claim per passenger has actually risen to £89.85 – a 44 per cent increase.

Fares for islanders have increased by even more than these figures suggest as the Air Discount Scheme does not cover fuel surcharges and other non-discounted add-ons which have also risen significantly in recent times and particularly from February 2026, which is close to the end of the reporting period covered by the FOI request.

The new information comes on the back of the Scottish Government being forced to fork out an additional £1 million in subsidy to restore Inverness links with Stornoway, Kirkwall and Sumburgh from October after they were withdrawn in July, without public consultation.

​Withdrawal of the Inverness-Stornoway morning service was going to cost the Western Isles NHS Board alone more than £1 million – pointing to the need for a holistic view to be taken of how these services are funded and the value for money obtained.

Loganair’s fares have risen to the point at which an unsubsidised return fare booked at relatively short notice can cost more than £650 between Glasgow and Stornoway or Benbecula. Even subsidised fares can often cost more than £400 return on island routes.

Since 2012, the ADS has been restricted to leisure traffic, imposing unaffordable costs on island businesses. SNP ministers have repeatedly said that restoring the discount to business travel is “unaffordable” - while, as it now confirms, paying millions extra for the scheme as it exists.

The chairman of Holyrood’s transport committee, Willie Rennie MSP, told the Gazette: “These figures make it imperative that there is further investigation into how our flights to the islands operate. To pay more for less raises lots of questions.

“The government responded positively to the recent reductions in services from Inverness but I think everyone accepts that we need a more sustainable and stable arrangement”.

Donald Mackinnon MSP, who is a member of the transport committee, said: “ADS represents a significant public investment in our air services but with very limited public control over the outcomes. Loganair are left to set prices as they see fit while air travel is increasingly beyond the reach of many islanders even with ADS.

“The debacle over the Stornoway – Inverness flights, along with the ever-increasing cost of air travel and unworkable timetabling, all point to the need for the Scottish Government to get a grip on Highlands and Islands air travel. We need an air service that works for islanders and that’s certainly not what we’re getting at the moment”.