Economic Development found hundreds of thousands of pounds from its 2026 budget to subsidise British Airways’ daily service which starts in April.
But the committee declined to provide details when asked which specific areas of its budget it had reduced to free up the money it has committed to the Heathrow route.
‘The committee has revisited its priorities against the funding available and identified how it could meet the Heathrow funding by phasing activities and related spend over a longer period,’ said Economic Development president Sasha Kazantseva-Miller.
‘I think it is important to state that reducing an area’s budget does not mean that we view it as inessential.
‘There are a variety of reasons why we may be able to reduce the cost – for example, if the scope of work changes from what was initially envisaged, or we use internal resources rather than external, or procure services at a lower cost than was originally assumed.’
The multi-year deal with British Airways is understood to involve a financial commitment from the States of about £1m. a year in total, made up of Economic Development’s subsidy and discounted airport fees agreed by the States Trading Supervisory Board.
Economic Development found the cost of the subsidy from its own budget after Policy & Resources declined to fund it.
Deputy Kazantseva-Miller acknowledged yesterday that there would be consequences for her committee’s budget in future years.
‘Clearly, the committee will have less flexibility in its budget to support future, unknown opportunities,’ she said.
‘However, we will continually review the budget throughout the term, allowing us to continue to be as efficient as we can with the taxpayers’ money allocated to us.’
Economic Development has a cash limit for 2026 of £12.74m., about £150,000 less than its authorised expenditure for 2025, although the latter included several one-off items stripped out before this year’s budget was finalised.
It includes £2.8m. for grants and support schemes, £2.7m. for marketing and tourism, and £1m. for strategic projects.
Funding for the Guernsey Competition and Regulatory Authority was one part of its budget which Economic Development guaranteed it had not reduced to help subsidise the new Heathrow route, after the authority recently blamed cuts to consumer protection on funding decisions made by the committee.
‘There has been no direct reduction in funding to the GCRA, and changes were not made in order to enable the Heathrow subsidy,’ said Deputy Kazantseva-Miller.
‘Our assumptions for the budget for the GCRA did not change before, during or after discussions with British Airways.’
The year-round daily rotation will start on Sunday 19 April, with flights leaving Terminal 5 at Heathrow at 11.55am and arriving in Guernsey at 12.55pm, before setting off again at 1.50pm and landing at Heathrow just before 3pm.
A combination of Airbus A319 and A320neo aircraft will be used to operate the route.
Economic Development has said the route will improve air links for business and leisure passengers and the Guernsey Hospitality Association has estimated that it could be worth £20-40m. a year in economic activity for the island.
Aurigny and some politicians have warned that the new service could result in the States-owned airline losing passengers and closing routes.