P&R calls for coherent framework for air routes and warns of growing Aurigny losses
IT IS anticipated that Aurigny will see losses of almost £10m. in 2020 if it continues operating the Alderney routes unsubsidised.
It has already been confirmed that the airline’s losses for 2019 are now forecast to exceed £7m.
The Budget report stated that continuing the unsubsidised Alderney routes could see losses of £9.6m. next year.
£8.6m. of the forecasted loss is comprised of operating losses, and £1m. is due to the disposal of the two old Dornier Classic aircraft.
The scale of these losses, which are a direct cost to the States, were described as ‘extremely concerning’.
‘We are beginning to see the financial consequences of a disjointed approach to air links,’ Policy & Resources committee president Deputy Gavin St Pier said.
‘The island has benefitted in some ways with more destinations to fly from, including a daily Heathrow service.
‘But a lack of coordination has arguably resulted, at least in part, to significant losses for Aurigny which the taxpayer has to cover.’
To find a sustainable solution, P&R is requesting that the States endorse its intention, in consultation with Economic Development and the States’ Trading Supervisory Board to develop a coordinated and coherent government framework that considers all aspects of air route operation and support that is under the control or influence of the States.
It is estimated that the airline will have a cash requirement of £27.7m. in 2020. In the budget it is recommended that the States authorises P&R to make a temporary overdraft facility to Aurigny or guarantee external facilities of a maximum of £25.7m. in 2020.