Sounds like GST is needed just to finance Aurigny

It is of course good news that Aurigny is ‘breaking even’ and its management are to be complimented on introducing cost savings.

However, if you are the monopoly provider of an essential service and your own price regulator, ‘breaking even’ shouldn’t be too difficult.

Frontier Economics reports that Aurigny on average overcharges the normal air fare from Guernsey to Gatwick by 139% compared to the Jersey air fare to Gatwick. That amounts to an annual overcharge of more than £18m.

Yes, that means that you, me, family, friends, businesspeople and visitors flying to and from Guernsey are deliberately being price gouged every year more than £18m. just to try to get Aurigny to ‘break even’.

Plus the States had to bail out Aurigny last year to the tune of £70m. to stop it going bankrupt.

Plus because Aurigny is selling its only planes that can operate in Alderney, it wants Guernsey to build a new Alderney airport so its larger planes can land.

Plus as Aurigny is selling the Embraer jet because of its salt-eroded condition it wants the States of Guernsey to buy two more ATR-72s at a further £40m.

More ‘Mad Hatter’ economics from the States’ Trading Supervisory Board in order to ‘save’ Guernsey taxpayers’ money. Sounds like GST is necessary just to fund Aurigny.

For goodness sake let’s join the real world and fly in modern eco-friendly jets to Guernsey at industry-normal air fares and save our tourist industry as well.

None of this is the fault of Aurigny management or staff. The States of Guernsey are mistakenly asking Aurigny to undertake a task which, because of Aurigny’s operational size, it is absolutely impossible for it ever to fulfil economically.

BA, EasyJet and other airlines have written to the States of Guernsey saying they want to fly to Guernsey but only if the airport runway is extended to at least 1,700m. A real economic investment for all our futures at an estimated cost of £60m.

No runway extension… no normal low fares.

PETER BACHMANN

Editor’s footnote: a spokesman for Aurigny replies:

The Frontier Economics report states: We then estimated that, if a low-cost carrier were operating on a particular route, then fares would be 39% lower than were observed in 2019.

This was a conservative estimate – the average fare from Jersey to Gatwick was 58% lower than the average fare from Guernsey to Gatwick.

Aurigny does not know where Frontier Economics got its fares data from but if it is correct that Jersey to Gatwick fares were on average 58% lower than Guernsey to Gatwick, then that would make the Jersey to Gatwick fare in 2019 an average of £34.52. With airport passenger charges and UK air passenger duty coming to an average of £20 each way between Jersey and Gatwick, £34.52 is very unlikely to be the average fare paid and certainly not a profitable fare for any airline without huge subsidies.

The Guernsey community should not expect fares on average of £34.52 in the event of EasyJet or British Airways providing year-round services to Guernsey. It is extremely unlikely that any airline would use scarce and valuable slots at London Gatwick to provide services that generated average fares as low as this and the losses that would inevitably go with them, unless it was with the objective of winning market share from a competitor to the point that it ultimately had a dominant share of the market that enabled it to increase fares to profitable levels.

Aurigny is not selling its only planes that can operate to Alderney. The States are exploring options to extend Alderney’s runway and if it goes ahead then Aurigny is likely to change its Dornier aircraft for another ATR aircraft. Replacing the two Dorniers with a single ATR would deliver significant cost savings, more seats into the market and a more reliable service, all of which would be to the benefit of the Bailiwick’s economy.

Aurigny is not selling its Embraer jet because of its salt-eroded condition, the aircraft is maintained in accordance with the manufacturer’s requirements and is in excellent condition. Aurigny is exploring the possibility of simplifying its fleet to increase productivity, economic and environmental efficiencies, and to improve profitability. Once a full evaluation has been completed, the outcome will be shared with the company’s shareholder and a decision taken. In the event that the jet is withdrawn from service, the same level of capacity would be provided by a higher frequency of services to the London area operated with environmentally-friendly ATR aircraft.

The larger Airbus 319 and 320 models which your reader describes as ‘modern and eco-friendly jets’ are in fact less environmentally friendly when operating short flights between the Channel Islands and London Gatwick than Aurigny’s current operation and far less environmentally friendly than an all-ATR operation.

Your reader states that ‘BA, EasyJet and other airlines have written to the States of Guernsey saying they want to fly to Guernsey but only if the airport runway is extended to at least 1,700m’. Is your reader able to substantiate this, and say how often they would like to fly to Guernsey?