70m. reasons for States to fix Aurigny losses

By year-end, it is anticipated that it will have cost taxpayers some £1,800 each – or an accumulated total of £70m. – but with no sign of that incredible drain of cash easing.

Those attending P&R’s financial baseline briefing, which disclosed there is no more money left for the States to spend, were surprised to see a chart that appeared to show the airline’s deficit disappearing.

Deputy Helyar’s explanation clarifies that. The losses remain. Instead, it is how it is presented on the books which changes.

Accounting niceties aside, the hard fact is Aurigny loses more than it makes and serving Alderney will now cost £2m. a year under a PSO agreement, not the £1m. which Gavin St Pier’s administration was aiming for.

So Aurigny’s losses will continue. For all its benefits, it remains a sub-scale airline serving a sub-optimal market with a fragmented and costly fleet.

Will it ever repay its debts to island shareholders? Deputy Helyar was silent on that, nor did he provide a payback timetable. So the subsidies will continue – perhaps under the heading of recapitalisation (for a second time) – until something changes.

And it must. Islanders might support a regular subsidy for its ‘own’ airline if there was no alternative. But there are.

Leaving aside the ‘too difficult’ issue of Guernsey’s inadequate runway, consultants PwC identified three possible solutions to the losses – fleet changes, code sharing or operating Aurigny as a virtual airline.

This last – retaining Aurigny’s name and rights as a shell airline with larger operators providing more cost-effective services – holds the most promise.

Yet it was dismissed, in part because the previous P&R was overly protective of the airline. That too must change.

As Deputy Helyar said when discussing the ‘no more money’ options, this Assembly cannot restrict itself only to what has been done in the past.