‘This is not about Aurigny, this is about economic growth’

I would like to express my congratulations to the States of Guernsey for the bold decision to strike a deal with British Airways on the Heathrow-Guernsey route. I appreciate not everyone is on board, including Aurigny.

When it comes to air connectivity there is a subtle difference between: (1) what is needed for economic growth, and (2) what works for islanders to go about their business, holiday and sports plans. So let’s put aside for a moment the rugby trips, holidays and the London business day-trip market.

Economic growth

When it comes to business, I was always taught, ‘if you want to beat the competition, you have to look like the competition’.

Guernsey’s biggest financial services industry is the fund industry. Most of those initial decisions about fund domicile come from London, be it from the large international financial services businesses themselves, the investment managers, or their lawyers. When they are making that decision, they are also thinking about all the board meetings they will need to attend in person.

I have never met a senior individual from an international financial services business who wants to board a propeller plane (unless it is their own) – I do not believe these people exist. People who build and lead international financial services businesses normally fly from London Heathrow on a jet. Until last week’s announcement, if they wanted to do business in the Channel Islands, there was only one destination – Jersey.

Furthermore, the London-based people who build and lead international financial services businesses will typically be frequent travellers with British Airways, often choose to fly in business class and will expect proper lounge access to work in before they travel. Until last week’s announcement, there was only one Channel Island destination from any London airport offering this service – Jersey.

From April 2026, that dynamic changes significantly.

The economics of the fund industry

Guernsey’s fund structures rank amongst the best in the world, and at Freedom we have set up many funds in Guernsey over the years. However, I understand from industry colleagues that Guernsey has been losing out to Jersey in terms of new fund launches.

If you consider that, every year, a typical fund is worth about £100-150k in fees to Guernsey-based lawyers, administrators, auditors, directors, the regulator and other service providers. And then consider that a typical fund will live for eight years, each new fund launched in Guernsey is worth at least £1m. of economic enablement to Guernsey over its lifetime.

So, if the new Heathrow air connectivity brings in just one new fund per month over the three years of the contract, you have just added £36m. of additional revenue to Guernsey’s economy. I believe it will be many more.

The economics of income tax

Guernsey has decided that its main source of tax revenue should be income tax – and supports a system where many islanders pay no income tax at all. So, it is all the more important that Guernsey attract high net worth individuals to move to, and pay income taxes in Guernsey.

Luckily for the Channel Islands, the UK government is doing a great job of inviting its best taxpayers to leave – and they have several choices about where to relocate, but the Channel Islands have historically been high up the list.

Let’s say a good relocating taxpayer is worth about £75k per year in income tax (some will pay more) and let’s say they stay for 15 years – that means they are worth £1.1m. each during their tax lifetime. If you attract just one more of these people every month for the three years of the contract, you have added £40m. of income tax receipts in Guernsey over their tax lifetime.

This is not about Aurigny

Many islanders are concerned about what this means for Aurigny’s schedule. Unfortunately, the senior management of Aurigny have not exactly excelled themselves over the last three years. So, at precisely the time when Guernsey should be welcoming taxpayers leaving the UK, Aurigny’s reputation for operational reliability is just not good enough. But this is not about Aurigny, this is about economic growth.

As a Guernsey taxpayer and someone who has built and runs an international investment management business, I strongly support this deal with Heathrow and British Airways, as should everyone else who wants this island to prosper. The alternative is higher taxes, GST and fewer highly-paid jobs, meaning lower income tax receipts, from a shrinking fund industry.

Adrian Harris
Co-founder, Freedom Asset Management Ltd