No scheduled flights will take place between Oban and the islands for at least six weeks from May 15.
Argyll and Bute Council’s Policy and Resources Committee was updated about the situation at a meeting in Lochgilphead yesterday.
It means that people travelling to and from Coll, Colonsay and Tiree will need to make the longer more time consuming journeys by ferry rather than flying from Oban Airport.
The current contract to run the flights, which is up on May 15, is worth £720,756 a year.
However talks between Hebridean Air Services, the only bidder, and the council, which operates Oban Airport, have broken down in a row over money.
Now the council is re-tendering the Argyll Air Services contract applying the minimum timescale possible.
It plans to send out an invitation to tender at the end of this month and award a new contract on June 28.
A council spokesman said: “As it stands, there will be no scheduled flights for at least six weeks from that date, while we work towards putting a new air services contract in place. A procurement process for a new three-year contract failed to attract an acceptable bid, and funding legislation means that, should a bid be accepted after a second procurement process, the contract could not begin until June 28 at the earliest.
“Due to EU law and state aid rules, we can’t identify any way to extend the current contract to cover the gap.
“Argyll and Bute Council is doing everything we can to secure a positive future for the air services and we are committed to finding a solution. However, we need an acceptable bid from an operator for this to happen. The contract outlines the level of subsidy available (more than £1.5million over three years) and makes it clear that we recognise changes may be required to the current timetable as part of a successful bid.
“We have communicated directly with communities on the islands on this issue and we will provide further updates as regularly as we can in the months ahead.”
Martin McWilliam, contracts manager for Hebridean Air Services, said the company had offered to continue operating the service in the interim.