Aurigny losses mount but no plans to change routes yet
INCREASED competition from open skies and a decision to subsidise the Heathrow link have hit Aurigny's finances, the airline has said.
But it will continue to provide its current routes for now.
It was responding to confirmation this morning that it was now expected to lose £7.6m. this year, up from an budgeted £4.4m. loss.
'The recent decisions on both open skies and the provision of a subsidy to Flybe do have substantial adverse cost implications,' the airline said.
'For Aurigny, these decisions have resulted in a significant loss of revenue and consequent deterioration in financial position, as announced by the president of the Policy & Resources Committee.
'The Aurigny board agrees that a more coordinated approach across the Policy & Resources Committee, Committee for Economic Development and the States Trading Supervisory Board must be taken to develop an airlinks strategy which balances customer choice with total cost to islanders in the long-term interests of the Bailiwick.
'The board would welcome an independently conducted refresh of the 2017 Strategic Review of Aurigny and this, in conjunction with the soon to be published Efficiency Review of Aurigny commissioned by the Scrutiny Committee, should bring clarity to the role that the States needs Aurigny to deliver as a States owned airline.
'In the meantime, the board has been liaising closely with the STSB to agree short term actions as the impacts of the States decisions have become clear and has been keeping STSB and P&R fully informed. It has been agreed that until further clarity can be provided, the airline should continue to deliver its full range of services for the islands despite the associated adverse financial impact.'
STSB has political responsibility for the airline, which is under a States obligation to break even.
When it provided its forecasts for 2019, no new routes or States subsidy for Heathrow, which was £825,000 for the first seven months, had been announced.
Since then new routes including Southend and Liverpool have come on line, both these receive rebates on charges from Guernsey Airport.
Aurigny says its losses will in the main result from a reduction in passenger numbers and turnover due to competition in the London market.
The forecast also includes losses incurred in flying to Alderney, with a decision on providing a subsidy on that route through a public service obligation still not finalised.
