The airline, which operated flights in the Scottish islands and in Wales, entered into administration following ongoing liquidity issues.

The company, based in Inverness, operated a fleet of nine small aircraft running services between Oban and the Inner Hebrides, Stornoway and Benbecula in the Outer Hebrides, and Cardiff and Anglesey in Wales.

Highland Airways also provided charter flights and other services such as newspaper delivery and Scotland fisheries protection air patrols.

The airline, which employed 100 people, entered into administration on 24 March 2010 having encountered trading difficulties, including the loss of several contracts.

The announcement came almost four months after FlyGlobespan, Scotland's largest airline at the time, also went into administration on 16 December 2009 as it failed to secure a finance deal.

The failure of Highland Airways has not only affected customers in Scotland, but also in Wales as the Scottish airline operated the North-South Wales route between Cardiff and Ynys Mon / Anglesey.