Scheduled flights to the key economic centres in England are performing well, an official announcement is imminent from Lufthansa of a new Dusseldorf service and we understand that good news may be on the way on Amsterdam.

But there is no doubt that this winter will be very difficult for the global aviation industry, maybe the most difficult ever. The Scottish and the UK Governments have demonstrated support for air services in the Highlands and Islands in the past, and we need them to do so again in coming months.

The UK Government introduced an exemption from Air Passenger Duty (APD) for flights from airports in the Highlands and Islands in 2001. But it has been consulting on replacing APD with Aviation Duty on flights, with no guarantee that the exemption will be extended. At a recent meeting between SCDI members and Flybe, growing concern was expressed about aspects of the proposals and SCDI has since written to the UK Government.

We have argued that while good progress has been made in improving connectivity for the region, the unique circumstances which led to the exemption still exist today, and justify an extension to all services departing from and arriving in the region.

SCDI has also argued that applying duty on each stage of multi-stop services, such as Southampton-Inverness via Leeds Bradford, may make the stopover uneconomic and threaten the entire route. Aviation Duty could be an improvement on APD, but it must not disadvantage the Highland economy — and it is questionable whether this is the time to introduce it.

Price has been a constraint on passenger growth, but capacity is also a particular concern. The Highland economy needs Inverness Airport to develop and attract more new routes, but, while the Scottish Government agrees, funding is not currently available.

Highlands and Islands Airports (HIA) has been pursuing ways of increasing and diversifying its income, but at present it can only fund infrastructure improvements from grants.

The Scottish Government has recently been undertaking a scheduled review to ensure that HIA is continuing to meet the needs of passengers and businesses.

SCDI hopes that it will recommend more flexibility to borrow privately for investments such as expansion at Inverness Airport.

But even with new direct international air routes, we need to regain access to the UK's hub at Heathrow Airport. SCDI, along with local business organisations, HIE and HITRANS, has been supportive of additional capacity at Heathrow and has been pushing the UK Government to guarantee that some will be safeguarded for flights from Inverness.

We continue to do so, but it is not all about lobbying Government. The development is a highly-controversial local political issue and the Conservative Party, which may make the final decision, is currently opposing it.

SCDI has written to David Cameron to inform him of its importance to the North of Scotland and ask him to review his position.

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