75 at risk as Anglo cuts costs

STAFF at Anglo Normandy Aero Engineering were warned yesterday that their jobs were not safe. The company dropped its pre-Christmas bombshell on 75 employees when they were told the company was operating at a loss and needed to reduce costs.

It faces losing £140,000 this year.

Some staff could go before the end of the year, although the company will offer a redundancy package.

'Nobody has been made redundant yet,' said Peter O'Donovan, finance director at the States-owned holding company Cabernet Ltd.

'We're in the process of consultation that will take a couple of weeks. We're not talking large numbers. If we can do it by natural wastage, we will do it like that.'

Mr O'Donovan blamed a decline in engineering contracts with other aircraft operators for the worsening financial position of the company.

The company has been losing out while bidding for contracts in a very competitive market place, he said.

Its work on the Aurigny fleet accounts for half of the company's turnover. It still has work with airlines in Spain, Seychelles, Lithuania and Wales.

Anglo Normandy lost £137,000 last year, and although it budgeted to lose £54,000 in 2006, currently operating profit is running nearly £100,000 behind budget. Overheads of just below £1m. have pushed the company into deficit.

Sister company Aurigny has turned around its financial position this year, and will make up for Anglo Normandy's losses. After the airline lost £605,000 last year, it budgeted to cut those losses to £122,000.

But it is on track to make a profit of more than £300,000.

The financial position of both companies was unveiled yesterday in the 2007 Budget report, which releases the most recent but unaudited trading results for the group.

Anglo Normandy, an aircraft maintenance and repair firm, based at the airport, was established in 1975. It expanded after linking with Aurigny, and moved into a purpose-built state-of-the-art hangar in the 1990s.

The States bought both companies in 2003 to safeguard lifeline Gatwick slots with Aurigny.

Treasury and Resources has been authorised to facilitate the Aurigny Group's borrowing from third parties.

An option was secured with a local institution last year to provide up to £4.2m. and at the end of September this year, the amount borrowed stood at £3.9m.

In his report, minister Lyndon Trott says: 'The department is very pleased to note that the figures to August 2006 are well ahead of the budget and show a surplus.'

His comments come in a section referring to the operations of the States Treasury and its ability to lend money.

Some £92,000 was lent to the Guernsey Gambling Control Commission but this has been written off at the taxpayers' expense because the casino project has been dropped.