Provision for Public Service Obligation Air Services

Argyll and Bute Council is seeking to appoint a single operator to deliver Public Service Obligation (PSO) Air Services connecting Oban with the islands of Coll, Colonsay and Tiree. The Contract is for a four-year period commencing on 16 September 2027 and ending on 15 September 2031. The Services are intended to provide safe, reliable, resilient and financially sustainable air connectivity for island communities, supporting access to education, healthcare, essential services, employment, tourism and economic development.

The successful Operator shall be responsible for the operation, management and delivery of the scheduled air services, including aircraft, crew, maintenance, booking and ticketing arrangements, customer service, marketing, performance reporting and associated operational activities in accordance with the Contract requirements.

Argyll and Bute Council is providing advance notice of its intention to procure a contract for the operation of scheduled passenger air services between Oban and the islands of Coll, Colonsay and Tiree. The contract is expected to commence on 16 September 2027 and continue for a period of four years.

The service is supported through a fixed annual subsidy and forms an essential transport link for island communities, providing access to healthcare, education, employment, business, public services and tourism opportunities.

The Council intends to adopt an output-based approach and encourages operators to develop innovative proposals. Tenderers will be free to determine, within the available subsidy, their proposed aircraft type, service timetable, seasonal variations, fare structure, marketing strategy and route development initiatives.

The successful operator will be responsible for the design, operation, promotion and management of the air services, including scholar travel provision, passenger booking arrangements, performance monitoring and reporting. The Council will provide support including a fixed subsidy, waiver of PSO landing and passenger fees at Council-operated airports, office accommodation at Oban Airport and access to airport facilities required for operation of the services.

The Council anticipates publishing a contract notice and tender documentation at a later date and is issuing this Prior Information Notice to raise market awareness and encourage engagement from suitably qualified air service operators.

This Prior Information Notice (PIN) is issued for information and market awareness purposes.

Tenderers maybe required to detail:

• How they will operate the service
• What aircraft they will use
• What timetable they will provide
• What fares they will charge
• How much subsidy they require
• How they will market and grow the service
• How they will maintain resilience and reliability
• How they will report performance to the Council
• How scholar travel requirements will be met

The Contract has fixed subsidy of around GBP512,207 per annum, equating to an estimated total subsidy of GBP2,048,828 over the four-year Contract Period. The successful Operator shall deliver the Services within the available subsidy.