Auditors have flagged a warning over Loganair’s future trading, according to reports.

The Glasgow-based Herald newspaper is reporting that auditors have warned of a ’material uncertainty’ which may case doubt over the airline’s ability to continue as a going concern in the face of the ongoing challenges presented by Covid.

Loganair operates flights from Ronaldsway to Liverpool, Manchester and Heathrow.

The routes have been subsidised by the Manx government to the tune of £4,672,910 since April last year. Latest statistics show that it carried just 963 passengers in February.

Accounts filed at Companies House show Loganair made a pre-tax loss of £12.7m for the year ended March 31, 2020.

It saw operating losses of £1.9m following a sudden reduction in passenger demand last March, and a further £1m of hedging losses on fuel and currency contracts for the year to March 31, 2021.

Loganair expects to report a ’significantly narrowed loss’ for the current year, citing income from contract and charter flying alongside a ’rigorous focus on costs’.

But directors note in the accounts there exists ’significant uncertainty’ as a consequence of Covid and the actual trading experience moving forwards may be materially different to that forecast.

The company’s auditor states: ’Whilst the directors have instigated a number of measures to mitigate these potential risks, there remains a material uncertainty which may cast significant doubt on the entity’s ability to continue as a going concern, due to the impact of future events not yet being known.’

Loganair has used the furlough scheme and agreed a £25m loan facility with Clydesdale Bank when it refinanced in July. It has also made redundancies.