Wick Public Service Obligation

Public Service Obligation Factsheet

What is a Public Service Obligation (PSO) and how does it work?

A PSO is a type of contract often used to support public transport between two or more regions, where it is not possible for the service to be delivered commercially. These are generally used in Scotland on what are called ‘lifeline’ services.

A PSO involves a public body signing an agreement with an airline to provide services to a set schedule and specification. The two parties calculate the cost of running the service and how much income can be made from fares, then public funding makes up the difference between the two. This allows fares to be capped at a more affordable level and a timetable developed that suits the community.

What are the terms of the Wick-Aberdeen PSO?

The Wick-Aberdeen PSO is funded by Transport Scotland and Highland Council through a contract with Air Charter Scotland. The current PSO is set to be in place until 31 March 2026, with an option to extend subject to funding confirmation from Scottish Government. We are currently in the process of seeking bids to run a future service from 2026 onwards. It is expected that a contract will be awarded by 31st March 2026, subject to funding, and that the contract start date will be up to 6 months from the award date of the contract.

As a ‘lifeline’ service, the main goal of the PSO is to support the community of the north Highlands, giving residents better access to employment, leisure, healthcare and social opportunities. It is also designed to support businesses by improving connectivity with the rest of the UK and accelerating tourism.

In addition to funding from Transport Scotland and Highland Council, the PSO is monitored and supported by a range of local stakeholders, including Caithness Chamber of Commerce, NRS Dounreay, Highlands and Islands Airports Limited, Focus North, Highlands and Islands Enterprise and local councillors.

What happens if the service doesn’t meet agreed standards?

The PSO is a collaborative partnership, and all stakeholders work together to monitor performance and sustainability. If service levels are not being met the first step is always to open a constructive dialogue with the operator. This seeks to identify why the issues are occurring and what steps might be taken to resolve them.

If there is no improvement in service standards, contracting parties may consider penalties or – in the case of complete failure – invoke relevant contract clauses.

Our priority is to protect the PSO and the lifeline service it provides to the north Highland community.

What am I entitled to if my flight is cancelled?

There is a standard process in place in the unfortunate event of a flight cancellation:

Passengers will be offered a full refund in the event any cancellation delays their arrival by more than 5 hours

AND

Wherever it is possible to do so, passengers will be offered a free road transfer to their destination

Passengers will be offered a free seat on the next available flight

Why Aberdeen and not another destination, such as Edinburgh or Manchester?

There is strong demand for an Aberdeen service particularly from the business sector and the offshore oil and gas industry. Aberdeen also offers vital connectivity to the rest of the UK, with London, Manchester and Birmingham being popular onward destinations. The delivery of a service to Aberdeen was feasible under the limited budget allocated to the PSO. Other destinations, including Edinburgh, are considerably more expensive and simply unaffordable in the existing funding package. The PSO contract for Aberdeen is publicly funded and legally binding, so it cannot now be altered. However, stakeholders are very much aware of local demand for other destinations and ambitious to deliver as much as we can for the community within tight financial restrictions.

Why can’t Kirkwall or Sumburgh flights ‘drop in’ to pick up Wick passengers?

The PSO contract is with Eastern Airways so it is not contractually possible to ask other airlines to intervene. They have their own routes to manage and published schedules to meet. Additionally, crew and aircraft work to certain hours and start/end points, which is necessary for the whole network to operate. Simply, it is not logistically possible to offer onward travel via a different operator.

Are there longer-term plans for the PSO beyond March 2026?

Local stakeholders are in constant discussion about the future of Wick John O’Groats Airport. A working group is in place bringing together Transport Scotland, Highland Council, Highlands and Islands Airports Limited, Highlands and Islands Enterprise, Caithness Chamber of Commerce and Focus North. Together, this group examines not only the case for ongoing funding for the PSO, but a sustainable, innovative operating model for the long-term sustainability of the airport.