Aurigny forecast to lose at least £24m. this year

A further provision of £2m. has been put aside for losses relating to next year’s Alderney routes.

However, it noted that there is ‘considerable risk’ in forecasting these figures, as there is significant uncertainty around when flying operations and passenger demand for travel will pick up again.

Therefore, it is possible that, unless other mitigating action can be taken, the losses actually suffered in 2021 could be higher than the current forecast.

Policy & Resources wants to make a temporary overdraft facility available to Aurigny, or guarantee external facilities, of a maximum of £53m. in 2021.

Aurigny CEO Mark Darby said the airline has worked closely with the States and Guernsey Airport to play an active role in ensuring people are able to get vital medical treatment off-island, helped with essential worker travel, maintained a vital lifeline for islanders and relatives and took many students to university ahead of their new term, as well as carrying some 400 back to ensure they get home for Christmas.

‘This year’s financial performance reflects the enormous impact of the pandemic, and the cost that has had to be incurred to maintain the island’s lifeline air links throughout. This has once again proved the strategic importance of owning an airline, to maintain and protect key connectivity for the community,’ he said.

‘The 2021 Budget has been difficult to forecast with so many variables, what is certain is that there will be a cost to recovery post-pandemic and with it the opportunity for Aurigny to support the States Revive and Thrive programme.’

In March, the States was advised that it was projected that Aurigny’s 2020 losses and cash requirements would significantly increase.

The States resolved to increase the existing authority for P&R to make a temporary overdraft available to Aurigny of £27m. to a maximum of £52.7m. so the airline remained ‘ready in waiting’.

Of the current £24m. forecast loss, £3.7m. is attributable to the Alderney services and the total significantly exceeds the total budgetary provision of £9.6m.

The rise is said to be a direct result of the impact of travel restrictions during the Covid-19 pandemic.

In respect of 2021, the current forecast of loss is £14m., with a cash requirement of £53m.

Aurigny’s budget has been prepared based on a number of key assumptions, including a gradual return to a busier flying programme during the year, increasing frequencies and destinations as demand stabilises.

In addition, a separate provision of £2m. has been made within the budget reserve, pending agreement of the terms of a public service obligation contract with Aurigny for operating the Alderney routes.