Scottish airline Highland Airways has been taken into administration, with flights cancelled and no further bookings being taken.

Administrators PricewaterhouseCoopers were called in late last night, subsequently taking over the running of the firm this morning.

The Inverness-based airline operates a fleet of 11 aircraft and was founded in 1991, shuttling passengers around numerous island destinations in the north of Scotland.

Highland Airways also operated an intra-Wales flight, connecting the north (Anglesey Airport) to the south (Cardiff Airport).

Bruce Cartwright, joint administrator and head of business recovery services at PricewaterhouseCoopers in Scotland, said: “The company had encountered trading difficulties including the loss of certain contracts.

“As a result they were in discussion with a number of parties over a period of time with a view to developing a new and viable operating model.

“The directors have now concluded that the option of maintaining operations while introducing a new investor is no longer feasible.”

The company held a UK Civil Aviation Authority (CAA) Type A Operating Licence, permitting the airline to carry passengers, cargo and mail on aircraft with 20 or more seats.

In a statement in CAA said: “While the administrator is reviewing the position the company is not expected to resume services in the near future and is contacting passengers who were due to travel to advise them to make alternative arrangements.”

The company, which employed roughly 100 people, had first acknowledged difficulties and sought new investment in January.

“As administrators we are conscious that Highland provided a valuable service within Scotland and Wales and we will be working with contracted customers to ensure an orderly handover of services to new operators wherever feasible,” added Mr Cartwright.

“It is inevitable that there will be a substantial number of redundancies but we will endeavour where feasible to assist the work force in securing employment with the new service providers.”