Profit comes with no guarantees
BOLD claims by Aurigny's management that the airline will be back in profit within three years may yet come back to haunt the States.
BOLD claims by Aurigny's management that the airline will be back in profit within three years may yet come back to haunt the States.
If the past three years of turmoil have taught investors and shareholders around the world anything it is that there is no such thing as a guarantee in business.
Gauging the future has been difficult enough for relatively stable industries, let alone such a volatile market as aviation.
Aurigny is pinning its hopes on a fifth service to Gatwick and continued development of the new East Midlands and Jersey-Stansted routes – but success depends on a number of variables.
Competition, new aircraft, a double-dip recession, all must be factored in before the champagne corks can start popping.
And that's before volcanoes, airport firemen and any new anti-terror measures are taken into account.
No one should be under any illusion that turning around an annual loss of £1.5m. within three years is a massive task.
That mission will not have been made any easier by the recent abortive merger with Blue Islands. If Aurigny thought the competition was fierce before, it can only expect that to heighten as Blue Islands reacts to the knowledge that the States believes that only direct ownership offers sufficient protection for the slots.
Passengers can expect the gloves to come off as each airline battles for market share with renewed vigour knowing that the promised land of profit will come largely at the expense of the other.
That must be true too of Flybe, the jealous third party left out in the cold by the short-lived merger. They, too, will have no intention of standing aside while Aurigny claws its way back.
So islanders are stuck with an airline that the States does not believe it should own and a promise of profitability that is far from a guarantee.
Rather like legal aid, taxpayers will have to carry a burden of unknown size long into the future. Their only hope is that by efficiency, cost-cutting and innovation that weight can be made as light as possible.
