Buckle up ... for a bumpy ride
THE December States meeting was much anticipated by those interested in Guernsey’s air and sea links – which, let’s be honest, means just about everyone. The meeting was expected to consider a trifecta of issues that could have far reaching impact on the island’s air links connectivity. The first order of business related to Aurigny’s air services, namely, the expenditure of US$60m. to purchase three new 72-seater aircraft to replace the current older versions in its fleet. The second matter involved consideration of the States’ air and sea route policy development and investment objectives including the open skies policy and the third matter, much anticipated, was a policy letter from the Policy & Resources Committee involving a review of the island’s air and sea links infrastructure, which was to include consideration of a PwC report into factors needed to strengthen the island’s air links infrastructure including the desirability of extending the Guernsey airport runway.
To the great disappointment of many, P&R, instead of issuing a policy letter of recommendations supported by the PwC report, released a statement through its vice-president to the effect that after taking into account the report, P&R had reached the conclusion ‘that the option of extending the airport will not be a game changer in respect of (Guernsey’s) connectivity… therefore spending hundreds of thousands of pounds of taxpayers’ money on listing the pros and cons of a set of runway extensions that are unlikely to be built in our lifetime will not be a worthwhile exercise’.
P&R, to its credit, conceded that ultimately the decision on whether to proceed with any further investigation of a runway extension is a government decision and will not occur unless P&R is directed accordingly by government when the matter next comes to the Assembly in the first quarter of 2019.
To those following this issue, this is quite an extraordinary and unexpected outcome. As the report has not been made public, we are left wondering whether PwC also opposed further investigation, or as those more suspicious have intimated, does the report in fact favour further investigation of options but P&R has formed a contrary view, making its release problematic? Time will tell on this issue.
Based on my 30 years’ experience in business and politics, I find it hard to believe that a PwC consultancy, tasked to review the pros and cons of a project such as the runway extension, would so early in the process put the option of further investigation into the ‘out basket’ without the benefit of a detailed economic analysis and without the benefit of broad business and community consultation.
P&R’s statement proclaimed that ‘what islanders consistently tell us is that they want frequency, what a longer runway offers is potentially less frequency as larger aeroplanes rotate routes less frequently’. P&R offers no explanations of how it surveyed islanders in relation to this issue, what numbers were involved in the survey or the method of consultation. Evidence of public consultation may well exist or it may be a convenient throwaway line. If the latter, that’s a grave concern given that this is used as a rationale for P&R’s decision to scrap further investigation.
P&R’s ‘frequency’ rationale is also contrary to the findings of a joint survey by the Guernsey branches of the Institute of Directors and the Chamber of Commerce. The joint survey attracted 477 respondents across the two organisations and included more than 1,000 written responses where a significant majority of respondents indicated that the island’s evolving air and sea links had negatively impacted the economy and business activity. In a joint statement, the IoD and Chamber submitted that weak air and sea links had a potential 0.25% negative impact on GDP growth and could result in a £100m. per annum negative impact on GDP by 2024.
The IoD and Chamber survey found that the priorities concerning the island’s London services were:
n Competitive fares (80%)
n An airline providing domestic and international connections (52%)
n A choice of airlines (40%)
n Heathrow or London City service (34% each)
Interestingly, in contradiction to P&R’s assertion, frequency did not rate as a priority. This suggests that more independent analysis is needed on this issue if the States are to make an informed decision when the matter comes back for deliberation.
P&R’s assertion that a longer runway offers potentially less frequency is challengeable by the logic that a longer runway allows for larger aircraft which can offer cheaper fares. Cheaper fares should lead to increased demand which will drive an increase in frequency.
I suspect that P&R’s statement has also created a tension within the States, particularly with Economic Development, which has as one of its key strategic objectives the strengthening of air links. P&R’s statement may force the committee’s hand to raise an amendment to P&R’s policy letter in February/March challenging P&R’s rejection of further investigation of the runway extension options. Given the conflicting evidence in relation to the community’s aspirations, the issue warrants further independent investigation. P&R’s publicly stated position ahead of the release of the PwC report risks being perceived as predetermined and lacking due process. Given the critical impact air and sea connectivity has on the visitor economy, the finance sector and island life in general, a rushed dismissal of this important issue sits uncomfortably with many islanders. If P&R’s intent was to bring this issue to a smooth landing, they should fasten their seat belts because I foresee ongoing turbulence.