TAXPAYERS will not receive any money from the sale of Aurigny to Blue Islands until the new joint airline turns a profit, it has been revealed.
But Flybe said yesterday it was prepared to pay ‘millions’ for the ailing airline – and guarantee the Gatwick slots it owns.
It is now threatening legal action over being excluded from the sale process.
Aurigny’s seven years of public ownership has cost the States about £12m. but Treasury minister Charles Parkinson expected the States eventually to get a return.
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Article posted on 16th July, 2010 - 2.30pm
21 Article Comments
I’m not surprised in the slightest that FlyMaybe are threatening legal action of this matter, as they want the monopoly to fly between the UK and Guernsey. That way, they can chop & change routes at their will with no consideration for Guernsey’s needs, and can get away with charging a King’s ransom to fly over the (already) most expensive piece of water in the World…..
This is the airline, remember, that paid for ‘actors’ to fly on some of it’s routes (Norwich to Dublin being one of them) in order to avoid having to pay ‘fines’ due to lack of passenger numbers. T
This is also the airline that charges £10 EACH WAY to carry your bags.
This is also the airline who has REFUSED TO ANSWER the dozen e-mails I have sent them, requesting a break-down of their taxes and charges, and will not answer the question as to why they charge approx. £50 in ‘charges and taxes’, when UK’s APD (Air Passenger Duty) is only £11 – which is what Ryanair and easyJet charge.
Lets put to rest the myth that Flybe are a ‘low cost’ airline – they’re not. Guernsey should open up to the like of Ryanair and easyJet – it would do tourism on the island a world of good.
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I THINK THAT BLUE ISLANDS SHOULD RETAIN THE NAME AURIGNY. IT IS A WELL LOVED AND ISLAND CONNECTED NAME…..
BLUE ISLANDS – PLEASE KEEP THE NAME…
GUERNSEY PRESS SHOULD DO A CLICK VOTE ON THEIR WEB SITE ABUT THE NAME…
AS FOR FLY MAYBE….WE DO NOT WANT THEM HAVING TOTAL CONTROL OF OUR ISLANDS…IMAGINE US BEING DEPENDENT ON THEM…THEY WOULD INFLATE PRICES, ADD ON MORE SURCHARGES, AND CHANGE FLIGHTS AT WILL….FLY MAYBE CANNOT BE ALLOW TO BUY AURIGNY…..
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This is absolute madness. For one thing, AURIGNY(1968-2010) is a MUCH better established brand than Le Cocq’s Airlinks-(2001-2003)-Rockhopper-(2003-2006)-Blue Islands-(2006-2010). A simple check of web traffic shows Aurigny much higher (#81,000 in UK vs Blue Islands at 136,000) than Blue Islands. A smart businessman would keep the well established brand, rather than drop it in favour of his four year old toy……But that’s completely symptomatic of the ‘thinking’ that’s gone on in this behind-closed-doors deal. I hope the States chucks it out.
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Why does everyone put Flybe down, personally never had a problem and am a frequent flyer, also find if you book in advance prices are very comparable, the comment on introducing Ryanair and Easyjet is laughable, the person in question has obviously never used these airlines, perhaps he/she should try, at the same time start 18/30 holidays or open Butlins on the Island, really would lift the tone.
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Verity, hear hear! I`ve always loved Aurigny and the sound of those little Joeys (can`t think what Flymaybe would introduce in their place!)
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WATM – the reason why they haven’t replied is probably because the information is readily available on their website. I went onto Flybe.com and started the booking process. Simply by clicking on the “Taxes and Charges” link it delivered the following:
Sector 1 – Guernsey to London Gatwick
Airport Fees & Charges GBP3.97
Security & Insurance GBP7.50
Sector 2 – London Gatwick to Guernsey
Government Charges & Duties GBP11.00
Airport Fees & Charges GBP11.67
Security & Insurance GBP7.50
Total : £41.64
Excluding the £15 spurious “Security & Insurance” premium, the rest is Airport fees, departure taxes and Government levies.
By way of comparison, the same flights on Aurigny came up as follows:
Passenger Service Charge £ 17.70
Fuel/Security Charge £ 12.00
Air Passenger Duty £ 11.00
Total: £40.70
Leaving a grand total of 94p difference in charges and levies.
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Jeff – You are lucky then as I have been stuffed around by Flybe on more than one occasion. I am a frequent flyer by the way, at least once a week.
A crazy solution. The price paid to keep Aurigny is always worth it compared to putting our faith in a small airline called Blue Island controlled by one man. They could be gone tomorrow. When Mr Coates dies, who inherits? Who is going to be in charge? They may not be so loyal to Guernsey as Mr Coates is.
I understand it costs £118 per islander per year. If that figure is right then Aurigny is the best bargain around.
Why not have a cooperation agreement between the two airlines?
Why is Mr Coates wanting to buy Aurigny? (even if it is only at £1). Answer – He thinks he can make money in 2 years, so why not get him to run Aurigny without owning it?
Lobby your deputy, we must keep Aurigny.
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WATM makes an excellent case for caution and concern about Flybe. Their charges are one financial ratchet after another, and their calculation of taxes is impossible to understand – one is tempted to say they think of a figure and then double it. I travel frequently to Guernsey (not for business)and have found Aurigny to be a pleasure to deal with – what you see is what you pay.
If Flybe ever got their hands on the only competitor and had a monopoly, the outcome would be as Verity predicts. If that happened, the Island would suffer.
Can the States really not find a way to keep Aurigny viable and independent?
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It’s no secret that FLYBE are after routes not airlines, and if that came with a monopoly then all the better for them, I have not flown with them for at least 5 years, they over charge and do not have the island’s best interest at heart. I feel if they had Aurigny the prices would sky rocket.
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Janus writes “Can the States really not find a way to keep Aurigny viable and independent?”
Isn’t that what selling it to Blue Islands is meant to do?
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Oh no. Not Flybemaybe – please do ANYTHING except sell the airline to them. We all know they are less than useless. Fares will rise, planes will be cancelled if they are not full (oh sorry – they will be grounded due to technical problems!).
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Don’t forget Air Southwest (another great little airline) also connect Jersey and Guernsey to the UK.
Agree that Fly(may)be buying Aurigny would be bad news in the long run, fares would soar!
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The comments about getting Easyjet and Ryanair in Guernsey are laughable and a complete waste of time. Unless you get a much longer runway and better parking facilities they wouldn’t even consider it.
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Ok – lets get a couple of things straight here.
Both Blue Islands and Aurigny are not viable as they are. Both lose money.
Excluding the two Aurigny ATR’s both fleets are pretty much end of life – more specifically the Trilanders.
On the ATR’s they are effectively owned by us – the Guernsey tax payer. Therefore Aurigny’s balance sheet must look pretty grim.
Both fleets need massive investment – which cannot be done without cash in the bank or loans effectively from us. Which isn’t going to happen.
Air SouthWest is a great little airline, like Aurigny – but is currently up for sale and trading at a loss.
EasyJet and Ryanair cannot operate here. Fact. And if you don’t like FlyBE…hmmm…you’d despise the other two.
So the situation is thus: Aurigny effectively merges with Blue Islands and all sides pray that it works or you sell to FlyBe with caveats.
What most of the posters seem to want is a full fares service for a low fares price – mes non?
What we haven’t heard from Mr Coates is what business model the new Blue Islands will operate under – my suspision is that it will be full fare as he won’t want to try to compete with FlyBe (and lose).
What this will mean folks is that you can forget comparing prices – it will be simple, Blue Islands expensive vs FlyBe cheaper.
Oh and FlyBe have just come in left field and their first Embraer E175 jet will be based in Guernsey.
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Gilthead
I think you’ve pretty much hit the nail on the head.
All airlines (other than Emirates and Etihad I believe) are losing money at the moment. There is therefore an ongoing risk of any airline going bust. In many cases that’s just commercial life. In Guernsey’s case, as an island, it would be fatal. Surely it must be logical for the States of Guernsey to guarantee that we maintain all lifeline routes in the present climate ? The time to sell Aurigny is not now !
Merging Blue Islands and Aurigny make sense, provided that the States would not simply be increasing their loses by doing so (which seems very likely while competing on the inter-islands routes !). But if the States, instead of holding a 100% stake in Aurigny, held say a 50% (or 50% plus “golden share”) in a merged Blue Islands/Aurigny operation, and looked to exit in 2 or 3 years time when the airline industry is in better shape, then is that not a better solution all round ?
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David – I agree.
One small point – FlyBe are actually making a profit. Ryanair are also back in the black.
The original purchase of Aurigny was to keep the “life line” Gatwick route going. Fair enough.
One thought – what about giving (or selling) all Aurigny routes except Gatwick to Blue Islands and let them get on with it. And flog them the ATR’s if they want them.
Then enter a code share agreement with FlyBe to run the Gatwick route on behalf of the slot owners, the mothballed Aurigny. Or us if you like.
No doubt some clever lawyers could make a decent agreement between the two parties so that everybody wins.
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Aurigny should have kept it simple with the Jersey and Alderney routes. Since spreading it’s wings into the UK market it has done nothing but be a poor business. Sell the ATR’s and slots to Flybe, Keep the trilanders running between the island.
I don’t like Flybe, i really don’t like them, however if there is finances on offer to the coffers take them. If the routes they fly from here became so incredibly profitble it would take seconds for ryanair, easyjet & co to want a piece of the action. And with the runway extension possibility we would have no reason to turn away their offers.
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Gilthead
Flybe and Ryanair might now claim to be profitable (although I am sceptical) but they needed very deep pockets indeed to weather the economic.
I wouldn’t be against selling (or giving) those other Aurigny routes to Blue Island, along with the ATRs, but I’d still be concerned that Blue Islands could go under in the future. That’s whay I’d rather see the States have some ongoing involvement with whatever “local” airline is left, for a while longer yet.
The problem with just leaving Aurigny with the Gatwick route (to compete with Flybe) is that 100% of Aurigny’s overheads would have to be covered by that route. Diseconomies of scale would apply and it just wouldn’t work financially.
Damo – Flybe would have zero interest in ATRs. Its not an aircraft which they would use at all in their fleet.
For the answer is “Aurigny Blue Islands” as a merged airline, with the States of Guernsey retaining a significant stake. So what if it costs us £2m a year for the next 2 years to subsidise it ? That’s merely an insurance premium against us (a) losing all lifeline airlinks, or (b) Flybe holding us to ransom, neither of which Guernsey can afford to risk. Our airport is a vital strategic asset and an airline over which we have suitable influence should be viewed exactly the same.
I would also go further in suggesting that we sit down with Flybe to put in place something workable re. other routes to protect all parties. A sensible “partnership” with Flybe in which it doesn’t compete with Blue Islands but at the same time isn;t able to exploit islanders would surely benefit all parties.
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David
Good points however the day Flybe agrees to route protection will be the day hell freezes over.
Ask Eastern about the competition on Southampton – Newcastle – route discontinued due to Flybe’s agressiveness on the route.
Ask the Isle of Man about the various airlines that have come and gone due to Flybe muscling in on the Liverpool, Manchester lifeline routes.
Lets hope the States retain Aurigny either 100% or a majority shareholding.
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‘ang on a cotton pickin’ minute here…
on one hand, we’ve got Ming the Merciless (aka the Regulator, the likeness is chilling…) banging on about ‘fair competition’, and insisting on introducing it, despite the fact a current ’sole provider’ of a certain service (let’s face it, Guernsey Post) has said that competition will ruin it (questionable!)….
then on the other, we have a States owned entity’s sale being discussed behind closed doors (as it were), with no other company being given the same fair opportunity to put in an offer, and the current proposition potentially creating a virtual monopoly situation…
now, I don’t get out much, so my (genuine) question is, is Ming asleep, turning a blind eye, or is the creation of monopolies on his watch (with a STATE’S OWNED entity) now not the ‘area of expertise’ he get’s paid squillions to deal with…?
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Good question Scarlett – one which FlyBe is asking! Saldy there is no alternative to either merging BI and Aurigny or FlyBe taking over.
David – my suggestion was that Aurigny is mothballed and give the Gatwick slots to FlyBE as a code share partner – basically get FlyBe to run the Aurigny route on our behalf (with clever legal caveats on fares, back out clauses etc etc).
And maybe use Vlad the Impaler as Scarlett suggests!
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