A PROPOSAL to merge Blue Islands and Aurigny simply underlines their poor commercial performance, rival airline Flybe has claimed.
Blue Islands chairman Derek Coates said last week that his airline and the States-owned Aurigny could join together to create a ‘major player’ in the local market.
His comments came at a specially arranged meeting, which excluded Flybe. It was held between the two airlines and States members to discuss Commerce and Employment’s plans to liberalise air route licensing by handing responsibility to the Office of Utility Regulation.
Mr Coates said the proposals amounted to an ‘open skies’ policy and could hurt smaller airlines.
He added it was a bad idea to allow a dominant airline to have control over when it flies.
However, Flybe dismissed his concerns, stating that it ‘strongly rejected the monopolistic references made against it’, by Mr Coates.
Ian Taylor (pictured), Flybe’s general manager in the Channel Islands, said the airline had been a long-time supporter of liberalisation on the premise that it would lead to great benefits for Guernsey residents.
‘Flybe has never been, and never expects to be, a monopolistic supplier to the island,’ he said.
‘We operate with healthy competition on the vast majority of our routes, including those to and from Guernsey, and this is unlikely to change irrespective of whether or not the States decides to liberalise air licensing by bringing the island into line with 21st-century thinking.
‘Flybe can only assume that Mr Coates’s merger proposal underlines the poor commercial performance of both Blue Islands and Aurigny and that this attempt to seek protection from competition is one that pursues the hidden agenda of his airline.’
Mr Taylor said Flybe had little interest in competing with Blue Islands and Aurigny on inter-island routes, adding that he also thought it unlikely any other carrier would be able to break their stranglehold.
‘However, we do see opportunities for Flybe, and other new carriers, in the introduction of a wider choice of travel options for islanders,’ he said.
‘This will only be possible once the huge administrative burden that acts as a disincentive to airlines introducing new routes to and from the island has been removed.’
Mr Coates would not expand on how his idea to merge Blue Islands and Aurigny could work when asked yesterday, but did hit back at Flybe.
‘I believe that Flybe’s record speaks for itself,’ he said.
‘Throughout history companies have come together to benefit from synergies and shared knowledge, so I am somewhat surprised by the naivety of Flybe’s comments.’
Article posted on 24th June, 2009 - 11.30am
11 Article Comments
Blue Islands doesn’t really compete with Flybe as it doesn’t fly the same routes, apart from Southampton for a far higher price. In fact when I contacted Blue Islands a while back about the huge discrepancy in pricing between Flybe and themselves I was told that they were targetting a different consumer than Flybe – in layman’s terms that sounds like they weren’t actually trying to directly compete at all.
Flybe have built themselves into a major award winning European airline. Considering they started off as a small Jersey operation they must have done something right, although support from Jack Walker at a key time no doubt helped them along.
Personally I’d like to see a merger between Aurigny and Blue islands, in the form of a takeover of Aurigny by Blue Islands. At least that would get it off the taxpayers books.
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Paul Le P
You say you would be glad to see Blue Sky taking over Aurigny because “At least that would get it off the taxpayers books”
Would this happen? I thought the reason for the buying of Aurigny was to protect Gatwick slots from
private operators.
Would you be happy for Mr Coates to have the future of Guernsey / Gatwick operations in his control?
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Government has no place running an airline.
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Frequent Traveller.
Does your answer mean that you don’t believe the Gatwick slots need protecting?
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Stephen John: the truth is that we don’t have Gatwick slots under our control now, they are under the control of BAA or whoever owns Gatwick airport in the future.
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Paul le P
http://www.thisismoney.co.uk/30-second-guides/article.html?in_article_id=457609&in_page_id=53611
“In Britain, the allocation of landing slots at four UK airports – Heathrow, Gatwick, Stansted, and Manchester – is carried out by Airport Co-ordination Limited, a non-profit organisation.
ACL is funded by ten British airlines, tourism operators and airport owner BAA.
They pay the ACL a fee for providing scheduling information.
How does it work?
Slot ownership has become quite lucrative at busy airports such as Heathrow and New York’s JFK International.
Peak slots – early morning arrivals, and midday departures – at these airports are in huge demand because major airlines cannot expand services without the relevant take off and landing rights.
At Heathrow a pair of slots were recently bought by US carrier Continental for a reputed £30m.
EasyJet founder Sir Stelios Haji-Ioannou believes the £72.4m value the airline has placed on its slots at Gatwick is too high”.
Paul
Clear that the matter of slots aand ownership is somewhat diffferent to your perception.
You will see that airlines include the value of slots in their balance sheet.
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Frequentflyer
Government doesn’t run an airline but the people of Guernsey do own one.
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Historical rights to slots are nothing to do with the owner/operator of the airport, they are governed by legislation whereby airlines can gain historic rights to them after using them for a period of time and meeting certain conditions. Aurigny has met these conditions and has historic rights to 4 pairs of daily year round slots at Gatwick. As Aurigny is now operating a fith daily flight on six days a week, if they continue to do this, and meet the criteria they will have historical right to these as well.
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I am completely against any merger between Aurigny and Blue Island. My taxes, along with other tax payers of course, are paying for Aurigny to function. Why should my taxes pay for a Aurigny/Blue island merger. Is the real reason here that Blue Island may be in a financially vulnerable position in the world of aviation and nothing what so ever to do with a merger protecting slots at Gatwick. If Blue Island is struggling, then let it go out of business or Coates put his own millions into it without tax payer’s monies. Why should the middle classes continue funding the greedy wealthy in the island time after time.
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Thanks SJ & Raymond – I wasn’t aware of that information.
If Derek Coates bought out Aurigny and merged it with Blue Islands, would the new entity retain those historical rights?
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My understanding is it is more about not lossing the ability to have that route available to Guernsey. By owning the airline the States are never going to say that Gatwick is not profitable and drop it. This is what is being protected, that the airline by not being private does not have a hold over whether or not it decides on if it wants to keep flying that route. We lost the Heathrow link because the airline choose to stop flying it. It keeps the compeition and therefore realistic prices, if the Gatwick other party was a private airline and not Aurigny it may choose to stop flying, leaving one operator.. and what fare price potential hike then!
I see no wrong in the States owning a business, it is not the States runing it but the staff set up to run it. No different from other establishments, like the PEH, you get the right people in to do the running.
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