VIRGIN Atlantic is axing its Little Red air services to Scotland after just 18 months.

The airline, which is 51 per cent owned by its billionaire founder Sir Richard Branson, has said it has struggled to fill seats on its flights linking London Heathrow to Edinburgh, Aberdeen and Manchester, and finally admitted defeat after weeks of speculation that the operation would be axed.

The routes from Heathrow to Edinburgh and Aberdeen were launched in April 2013 after European competition authorities made British Airways relinquish Heathrow slots for domestic flying after its takeover of bmi. The final flights will run in September 2015.

Data published by the Civil Aviation Authority in June had shown some of the flights were flying at 40 per cent capacity.

The airline said Little Red had "not been able to make a positive contribution" to the company.

The Little Red service did not provide enough feeder traffic onto Virgin's transatlantic and international routes, the airline said.

When it was launched, Virgin Atlantic said the new airline would carry up to one million passengers a year, and create 375 jobs in the UK, including 130 in Scotland while generating £75m in visitor spend for the Scottish economy.

The company said the 100-strong UK cabin crew at Little Red were now expected to be offered jobs with Virgin.

Business and tourism executives reacted with concern to the development.

Ross Martin, chief executive of the Scottish Council for Development and Industry, said: "While Scottish airports have been making good progress in attracting new routes, this is a blow to Scotland's connectivity and there is a need now to focus on how our links to, and through, London and directly to international markets can be maintained and strengthened."

James Bream, research and policy director at Aberdeen & Grampian Chamber of Commerce, added: "The decision is dispiriting as this reduces choice for our business travellers.

"An absence of choice leaves the region vulnerable, and although we are still well served to Heathrow and other hub airports, our connections to global markets are vital to the continuing prosperity of the north-east."

David Birrell, chief executive of Edinburgh Chamber of Commerce, added: "It is obviously disappointing that they've taken this decision. However, the fact remains that business passengers have a great choice of options available from Edinburgh Airport."

Mr Branson blamed British Airways' dominance of the market and the "meagre package of slots" Virgin was given.

He said: "When the competition authorities allowed British Airways to take over British Midland and all of its slots, we feared there was little we could do to challenge BA's huge domestic and European network built through decades of dominance.

"To remedy this, we were offered a meagre package of slots with a number of constraints on how to use them and we decided to lease a few planes on a short-term basis to give it our best shot.

"The odds were stacked against us and sadly we just couldn't attract enough corporate business on these routes.

"The team did their absolute best to make a go of it and I thank them all for their amazing efforts."

Ryanair attempted to cash in by announcing yesterday it was preparing to open its third Scottish base at Glasgow International, ahead of the launch of its new three-times daily services between Edinburgh and Glasgow and London.

It said it was launching a £19.99 seat sale on its Edinburgh-London Stansted and Glasgow-London Stansted routes, which commence on October 26.