You were right. I tried the below and it did not work...
isql -S $SERVERNAME -U $LOGINNAME -i $ISQL_INPUT_FILE -w 500 >> $ISQL_OUTPUT_FILE <<EOF
-P$PASSWORD
EOF
So we will give your code a spin...
isql -S $SERVERNAME -U $LOGINNAME -i $ISQL_INPUT_FILE -w 500 <<EOF | tail +2 >> $ISQL_OUTPUT_FILE
-P$PASSWORD
EOF
Sincere thanks for your help.