‘Aurigny’s board needs to adapt’
GOVERNMENT has a clear vision for the island’s air links and Aurigny is critical in delivering it, if its board can adapt, Economic Development president Charles Parkinson has said in an open letter to the Guernsey Press.
The States-owned airline is predicted to lose £9.6m. in 2020, while his committee subsidises competition through Heathrow and backs open skies.
Air links policy aims to encourage routes to the UK and Europe though the quasi-open skies arrangement, attract new carriers and give Bailiwick residents access to healthcare services, while also securing connectivity to Heathrow and Alderney. Maintaining security of connection to Gatwick is another element of the strategy.
Deputy Parkinson said they had made significant progress, with the introduction of deregulation last summer, the States subsiding a link with Heathrow and organising a public service obligation tender process for Alderney.
‘So not only is there is a vision which informs a clear policy, but that policy is being implemented decisively,’ he said.
However, he raised serious concerns about Aurigny.
‘The Committee for Economic Development is supportive of Aurigny – as an island brand, as an economic enabler, and as an important local employer,’ he said. ‘However, the scale of the losses, and the apparent sudden increase in the losses, does concern the Committee for Economic Development as it does other States Members, and it fully supports this being actively investigated by the Policy & Resources Committee’s planned review.’
In an interview, Deputy Parkinson said that Aurigny had a monopoly on the Gatwick route, which covered 83% of market travelling between Guernsey and London.
‘I can’t see how they would not be able to make money out of that,’ he said.
‘I don’t understand how their difficult financial situation has arisen. The losses have ballooned from about £3m. a year to close to £10m. a year over the last few years. I don’t believe that is due to 50 people a day going to Heathrow.’
About £3m. of the losses are due to the Alderney route, which is under discussion currently. The airline is tasked with breaking even, while providing connectivity.
Deputy Parkinson said said he understood some of the routes were marginal, but Aurigny should be sticking to its remit.
In the open letter he said that going forward government would be continuing the improve and support air links.
‘This policy has been set out in public and implemented over the past 18 months,’ he said.
‘It reflects an assessment of our business and community needs. Aurigny’s role is critical in delivering this, but it can only do so if its board adapts its business strategy to deliver this policy.’
Aurigny was contacted for comment.
X-REF to Deputy Parkinson’s letter on page 16.
