A Loganair franchise deal with Flybe to provide services across Scotland is being severed after the two airlines failed to agree terms on a new contract.
The Scottish airline operates on lifeline routes between the Scottish mainland and islands, including the Western and Northern isles.
Loganair, which has operated under franchise arrangements with other airlines for 24 years, is to operate in “its own right” from September 1, 2017.
The carrier, which also runs flights between Edinburgh, Glasgow and Dundee to airports in England, had a franchise agreement with British Airways from 1993 to 2007, and then from later in 2007 with Flybe.
Flybe said its decision followed “a failure to agree future operational standards and commercial arrangements”.
Executive chairman Simon Laffin said: “Scotland is very important to Flybe, and we want to ensure that we serve our customers there to the highest standards, whilst delivering a return to our shareholders.
“We shall announce our plans on continuing to serve Scotland in due course.
“In the meantime, our customers can travel and book tickets exactly as before, while any new arrangements will be put in place from September 2017 onwards.”
Loganair said it was looking forward to operating under its own brand. The airline said it was continuing to discuss with Flybe potential opportunities to work together in future.
The Scottish airline is to establish its own reservations system by March 2017 for flights on and after that date on its website.
Peter Simpson, chief executive of Loganair and Bmi Regional owner Airline Investments Ltd, said: “Today’s announcement is a major milestone in the 54-year history of Loganair.
“Although Loganair has flown as a franchise carrier for larger airlines over the last 24 years, there is still a huge level of recognition and affinity for the Loganair name throughout Scotland and beyond.
“We believe the time is right for Scotland’s airline to now spread its wings once again, and are delighted to be introducing a bold new corporate identity to accompany this important move.”
Loganair managing director Jonathan Hinkles said: “The option to continue to operate the franchise would have resulted in a significant increase to Loganair’s payments to Flybe.”
He told the BBC: “The essence of a franchise is that you operate under another airline’s brand and you do things their way.
“That hasn’t always worked in our environment and while I think the franchise agreement we have had with Flybe over the last 10 years has worked well, there have been a number of elements of that, such as offering child discount fares and free bags to be checked in, that Loganair wishes to offer but don’t fit comfortably with the Flybe brand.”