Aurigny chairman warns of impact of subsidising rivals

The airline released its annual report yesterday, with its financial performance improving on the year before, when it lost £5.2m., approaching break even on Guernsey to UK routes and some improvement on the Alderney losses.

‘However, these results were set against an airline environment where routes were stable and quasi open skies had little or no impact,’ the report said.

While Aurigny said it was happy to operate in an open skies environment, it added that the fact that this was not on a level playing field, with heavy subsidies on competing routes, set them at a disadvantage.

‘Competition on London routes will have a negative financial impact in 2019 as is already apparent and we will be hit harder if further subsidies are given to competing airlines,’ a spokesman said.

In his chairman’s statement, Andrew Haining said it was unfortunate that the opportunity to use London-Heathrow slots that were offered to the airline in early 2018 did not progress.

‘We would have preferred that our offer had been adopted, as opposed to the one that has recently been launched by Flybe/Connect Airways and hope that we will have another opportunity to compete for the subsidy if that route continues,’ he said.

The adoption of an open skies policy; the provision of significant financial subsidy to competitors, including through waiving airport charges; increasing financial fragility of the smaller regional airline market; and the potential of a no-deal Brexit all contrived to generate greater uncertainty in terms of Aurigny’s ability to deliver the best possible service at the right price, he said, while still achieving a break-even target.

‘I would like to see Aurigny grow and be a stronger, more cost-effective provider of island lifeline services long into the future,’ Mr Haining said.

‘This is why, in 2019, we have taken advantage of the open skies policy to launch new routes to Jersey and Southampton that will provide attractive additional services for our customers and valuable additional activity to the business that enables us to utilise our aircraft fleet more efficiently.’

The arrival of three new ATRs later this year will see the average age of Aurigny’s fleet reduce significantly, making it one of the youngest fleets of any regional airline in Europe, with associated benefits such as reduced maintenance costs and improvements to customer service and reliability.

Further improvements in punctuality were seen in the first six months of 2019, showing 83.3% of flights within 15 minutes of schedule, including delays as a result of weather, compared with 81.1% for the same period in 2018.

Aurigny’s total revenue in 2018 was £45.5m, compared to £44.7m. in 2017.