Quasi open skies policy is quasi madness

The Committee for Economic Development is asking the States to approve an ‘open skies’ approach to all of our air routes except Guernsey-Gatwick and Guernsey- Alderney. In doing so they are bowing to long-term lobbying from employer groups like the Chamber of Commerce, which has long advocated a free for all on Guernsey’s air links.

With all due respect to both the Chamber and Economic Development, I think they must be bonkers. It is hard to conceive of something so potentially damaging to our connectivity as ‘open skies’.

What exactly does ‘open skies’ mean?

It means any airline can operate on any route without the need for a licence. In larger communities, with potential passenger bases many times the size of Guernsey’s, such an approach makes a great deal of sense. The greater the competition, the sharper prices tend to be and if some airlines are forced off routes because they can’t make them stack up there is usually someone else willing to give it a shot.

In micro communities like ours the situation is very different.

Most routes only have the passenger numbers to support one operator – if that. Challenger airlines usually claim they will grow the market but history tells us the scope for that is usually quite limited. Indeed many airlines might actually be put off investing in promoting new routes under open skies knowing that if they do make a go of it, others can simply step in and steal the fruits of that investment.

Too negative? Well don’t take my word for it. Let’s take a lesson from our recent history.

While we’ve never had totally ‘open skies’ we have at times had a very light touch to regulation. No good came of it. Let me give three examples:

1. We used to have a very good, regular and reasonably priced service from Guernsey to Jersey. Just to prove they didn’t favour their own airline, the States licensed a competitor on the route, despite knowing the traffic was too low to support two operators.

The upshot was that both airlines lost a bucket-full of cash on the route until the original operator decided enough was enough and withdrew. Now we have a service which is a lot less frequent and much more expensive than it used to be.

A real own goal.

2. Aurigny operates two rotations from Guernsey to Manchester daily throughout the year. Some years ago Flybe asked for, and was given, a second licence on the route. How did Flybe use it? They started operating a seasonal service, taking half of the ‘summer cream’ from the route and leaving Aurigny to cover the slimmer pickings in winter. As a result we came close to losing our year-round service. In the end this farce was brought to an end thanks to the existence of a licensing system. Under open skies there would have been nothing anybody could do about it.

3. Aurigny used to fly Alderney-Jersey. The States of Alderney licensed Le Cocq’s to compete on the route. Aurigny said ‘blow this for a game of soldiers’ and left the route. Shortly afterwards, so did Le Cocq’s.

You get the drift. The policy of open skies which serves airports with large potential passenger bases very well would, by contrast, be madness for Guernsey with its diseconomies of scale.

Economic Development says it is not proposing open skies but just ‘quasi open skies’. OK then, that policy is ‘quasi madness’. I intend to vote against it.

Instead I would tend to go in the opposite direction and promise applicants for licences on new routes sole operator status for a number of years if they were willing to sign up to a service level agreement with the States. That is far more likely to encourage investment in route development.

Turning to the States’ half-term report. A few weeks ago many people were lining up to pontificate on how pants the current Assembly has been over the past two years. Not only members of the public but States members too. Weird. It almost sounded as if they were in denial about being part of Guernsey’s government. Such sniping cynicism may be very populist, but I also think it’s unbalanced.

Sure, I am as frustrated as anybody on some of the things we have failed to deliver, but it really isn’t all doom and gloom. So here are my 10 reasons to be cheerful.

1. After seven or eight years of budget deficits, which depleted our precious reserves, we are back in the black.

2. Revenue spending has been controlled more strictly in Guernsey over recent years than in just about any other developed economy [too strictly?].

3. Unemployment is very low and the number of economically active islanders at an all-time high, despite an ageing population.

4. After years of the States being split down the middle over education, two thirds of the Assembly have agreed on a vision for the future.

5. Where the last States procrastinated over the disability strategy, the current Employment and Social Security Department seems to have real momentum and has even broadened the approach to embrace a wider concept of equality and anti-discrimination.

6. While its initial format was a kick in the teeth for the hospitality trade, and Home Affairs really struggled to cope with its introduction, in general the new population control regime is clearly less bureaucratic than the old housing law.

7. Our bus service goes from strength to strength.

8. We have approved a reformed and far fairer welfare system.

9. Young people can now get the contraception they need free of charge.

10. I think the new system of frequent, open scrutiny Q&As with committee presidents is proving its worth.

I know I could just as easily have listed 10 frustrations ranging from unfair waste charges to frozen tax allowances for the over 65s. And from unfunded cancer drugs to too little action on connectivity. Frankly, others have already taken the easy route of throwing stones, so I wanted to restore a little balance.