Aurigny losses top £1m. but sale ruled out

AURIGNY lost more than £1m. in the first eight months of the year - but there is no likelihood of the States-owned airline being sold.

To continue trading, holding company Cabernet Ltd has been forced to enter into a short-term borrowing arrangement with Royal Bank of Scotland International for up to £1.75m. until 31 March 2009, having also hit the limit of a £4.2m. loan facility backed by the States three years ago.

'It's in one sense disappointing, but in another not surprising,' said Treasury minister Charles Parkinson.

'Aurigny faces very high fuel costs, heavy competition on inter-island routes and Manchester and has an ageing fleet of aircraft which require a lot of maintenance.'

Both borrowing arrangements are guaranteed by Treasury and Resources.

A States decision in June 2007 means it will also guarantee any borrowing to buy two new aircraft at a cost of $37m.