The States 'was wrong to buy Aurigny'

THE States should never have bought Aurigny, according to former deputy chief minister Stuart Falla (pictured).

The Garenne Group chairman was yesterday asked about the loss-making airline's future. He was speaking at a Chamber of Commerce and Young Business Group workshop for small and medium-sized businesses.

And although he considered it a mistake for the States to have agreed to purchase the airline in 2003, Mr Falla, who was in the House from 2004 to 2008 - said that now would not be the time to sell it.

'A body such as the States of Guernsey cannot run a trading company. I came across some fantastic civil servants in the States, as well as some not so good ones, but their whole experience is not about running a company. But I would not sell it in the current climate because it has no value.'

It was revealed in last week's 2009 Budget that Aurigny had lost more than £1m. in the first eight months of the year.

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