Revised estimates show the States-owned airline losing millions more than previously expected – a total of £9.7m. in 2026 and a further £5.7m. in 2027 – to add to losses of nearly £13m. in the previous two years.
Declining passenger income as a result of British Airways’ new service to Heathrow was one of several reasons blamed for Aurigny’s deteriorating financial position.
‘Aurigny continues to face financial challenges arising from the impact of the Heathrow service and wider macroeconomic developments, including the war in Iran, higher fuel prices and weakening market demand,’ said Policy & Resources in its draft 2027 Budget released today.
The figures, described as ‘preliminary, high-level forecasts based on broad assumptions’, could worsen still further if fuel prices remain high and passengers continue to be lost to the Heathrow route, which started this year after the States agreed an undisclosed, multi-year subsidy.
The States Trading Supervisory Board, the committee which acts as shareholder in the States’ trading bodies, said it was still in talks with Aurigny to decide the airline’s future operating model, which is likely to be followed by a debate in the Assembly about its long-term funding requirements.
In the meantime, P&R is ensuring that the airline has sufficient liquidity to maintain the continuity of essential air services.
Aurigny made profits in 2022 and 2023 after years of losses. Its accumulated losses have led to the States re-capitalising the company to the value of nearly £100m. over the past decade. Meanwhile, P&R will ask the States to renew a policy under which proceeds from the Channel Islands Lottery continue to help fund annual losses at Beau Sejour.
Since 2020, the policy has allocated up to £700,000 a year of lottery profits to the leisure centre’s operating deficit, and P&R wants to extend the arrangement until 2031.
The five-year timeline was requested by the Education, Sport & Culture Committee, which is expected to lead a States debate next year on the long-term future of Beau Sejour, following a lengthy external review completed in August.
Among the States’ unincorporated trading bodies, only Guernsey Water and States Works are expected to increase their existing surplus next year, with the Dairy and waste operations remaining in deficit, and the ports returning to deficit after forecasting a small surplus for this year.
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