Aurigny losses top £1m. but sale ruled out
Friday 7th November 2008, 2:29PM GMT.
Treasury minister Charles Parkinson presenting his first Budget. (Picture by Peter Frankland, 0667516)
AURIGNY lost more than £1m. in the first eight months of the year – but there is no likelihood of the States-owned airline being sold.
To continue trading, holding company Cabernet Ltd has been forced to enter into a short-term borrowing arrangement with Royal Bank of Scotland International for up to £1.75m. until 31 March 2009, having also hit the limit of a £4.2m. loan facility backed by the States three years ago.
‘It’s in one sense disappointing, but in another not surprising,’ said Treasury minister Charles Parkinson.
‘Aurigny faces very high fuel costs, heavy competition on inter-island routes and Manchester and has an ageing fleet of aircraft which require a lot of maintenance.’
Both borrowing arrangements are guaranteed by Treasury and Resources.
A States decision in June 2007 means it will also guarantee any borrowing to buy two new aircraft at a cost of $37m.
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So Aurigny owes us nearly 6 million quid? We are going to spend another 37 million dollars on 2 new planes and for what exactly? More losses I suppose. What the hell is going on with our states at the moment? They appear to be almost proud to report on the losses that they continually make with our money. We need people to look after the public purse as though it was their own. What disinchants me further is the fact that when money is wasted it is all unchallenged and left to sort itself out. Can’t those that are responsible be made to account for their losses? It would appear not. Are we going to let this happen then complain when it is too late to do anthing about it at a later date? This Island is quickly becoming a laughing stock and has itself to blame.
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Paul the vital retention of Guernsey’s lifeline air link to Gatwick was at the time and remains a crucial strategic investment. If it costs the island £1m a year to keep Aurigny going then that’s a tiny price to pay.
No State-owned airline makes money, and very few privately owned airlines are making any profits in the current climate. Without Aurigny we would be entirely at the mercy of Flybe and its shareholders to provide us with any means of flying on and off the island.
£1m a year seems to be rather a cheap insurance policy in the circumstances.
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David
Where do you get your figures from exactly? 1 Million a year? Aurigny stands to owe us more than 20 million when we buy these shiny new planes. Would you like to finance it? I would love it if you would. Blue Islands are doing OK at their jobs maybe they could turn things around? Would Mr Coates be interested? In times like these people need to put their money before their mouths cos the whole economy is desperate for it across the board. If we continue to back losers we will ultimately become the same.
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Here here David
Retain Aurigny. We do not want to be at the mercy of Flymaybe! They cherry pick the routes. Manchester in the summer, Dublin, Paris. Where have these gone. Winter flights to Manchester via Southampton with a journey time of 4 hours! I think not.
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I think Guernsey owning its own external airlinks is essential. At any time a privately run enterprise could pull the plug leaving Guernsey with nothing. This operation may be losing money in a harsh climate, and frankly, will never be very profitable, but it is one of those things that an island needs in order to survive.
On a related note, the idea of independence seems nonsensical considering we would have to outsource all of our external relations. Let’s join the EU and be done with it. France is an attractive place for those that can afford the second home. Let’s make it our first home.
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I am sick and tired of hearing about how Flybe “cherry pick” various routes. Instead of moaning about this, maybe Mr Hart should concentrate on making his year round routes a success instead of acting like a spoilt child. Airlines don’t fly routes to ski resorts in the summer, people would be surprised if they did, so stop moaning about seasonal routes. Competition is good for all businesses, and I’m sure that Flybe don’t want to be the sole operators out of the island. That’s only give islands more to complain about them, if that’s possible!!
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Could Aurigny not just scale back routine maintenance slightly to cut costs? By increasing the inspection intervals on certain components the running costs of aircraft can be reduced dramatically.
Then Aurigny could move back into profit. Other small airlines have done this in the past in hard times to survive. Alaska airlines is a fine example.
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Didn’t Alaska have a crash off Los Angeles when maintenance questions were asked?
If Aurigny were to cut back on maintenance and have the misfortune to have an accident, think of the compensation claims.
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One million pounds loss is just a drop in the ocean when compared to all the money the States waste in the course of a year!
Hopefully a couple of newer aircraft and consequently lower maintenance costs will go a good way towards balancing the books next year – we need to keep Aurigny, as Flybe have shown in the past they will only service some destinations as and when it suits them, competition is needed on all routes.
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