WATCH: Aurigny records loss of £13.5m. last year
States-owned airline Aurigny lost about £13.5m. in 2021 as the pandemic disrupted the travel industry and a further loss is expected for 2022 before it moves into projected profit next year.
Aurigny bosses said that a five-year strategy was continuing to progress – including the prospect of further changes to its fleet that could see the Embraer jet and two Dorniers sold and replaced with two leased ATRs, although no date has been given for that.
Chief executive officer Nico Bezuidenhout yesterday said that 2021 had been ‘arguably a tougher year’ than in 2020 with passenger numbers still affected by Covid travel restrictions. But he said that the airline had navigated its way through the situation – so much so that financial performance had beaten expectations.
‘While there were still losses, and we’ll confirm final figures once all the procedures are done, we are happy to state that things went to expectations and better than expected.’
The airline was not expected to make a profit this year but he added: ‘Our five-year plan notes a marginal profit in 2023.’
WATCH: Aurigny CEO Nico Bezuidenhout on 2021 for Guernsey's airline
The States approved a recapitalisation of the airline last year, which involved debt being converted to equity – with the first part of that completed, and the second part due later this year.
The future shape of Aurigny’s fleet was also discussed during a media briefing yesterday. The airline is looking to reduce the variety of aircraft it operates to reduce overheads.
Last year, one of its Dornier 228 Classic Plus aircraft was sold while an ATR 72-500 was returned to its lessors. To fill the gap, Aurigny’s younger and more reliable ATR 72-600 aircraft were being used ‘more productively’. An extension to Alderney’s runway, currently being discussed, could also mean that Dornier aircraft could be released, said Mr Bezuidenhout.
An assessment had concluded that ‘in the order of £700,000 a year’ could be saved by not operating the Embraer jet Aurigny bought in 2014. ‘Fuel cost alone per seat is twice that on the Embraer than it is on ATR,’ Mr Bezuidenhout said.
There was also ‘weakness’ in demand on the Gatwick route, traditionally Aurigny’s strongest route by far, he admitted, as he warned that business travel may not return to pre-pandemic levels.
‘The decision however to swap out the Embraer is still pending finalisation and the simple reason is that we are in the process of aiming to secure additional frequencies, additional slots into Gatwick,’ he said.
Currently, if volumes stayed the same, three projected additional slots would not be needed, but it was necessary to plan for a return to pre-pandemic travel – with clarity expected within two months.
‘We foresee a situation where in a best-case scenario both the two Dorniers and the Embraer get sold off and the debt settled on those assets,’ he said. ‘They are then replaced by two leased ATRs.’
Lease assets were in the order of $75,000 a month, he said, with Aurigny getting ‘value’ for the Embraer if sold.
Returning to London City Airport as a destination was also under consideration, although the preference was to have a single consolidated operation at Gatwick to serve London and the south-east of England.
Mr Bezuidenhout concluded there would be recovery but noted the ‘uncertain environment’ of the ongoing pandemic, geo-political uncertainty, inflation, oil price volatility and a squeeze on consumer spending.
‘It is still going to be a tough time ahead. But I believe that our business is in a better shape to deal with these uncertainties as we go forward,’ he said.
