‘A bad time to spend £37m.’
Wednesday 11th March 2009, 11:30AM GMT.
FLYBE has hit out at Aurigny in response to the fall in passengers at Guernsey Airport.
It reported a 12.96% decrease in February compared with the same month last year. The drop equates to 8,173 people. January also saw a fall, of 2,743.
Flybe chief commercial officer Mike Rutter (pictured) said taxpayers should question how their money was being spent.
‘Given Aurigny’s decline in passenger numbers out of Guernsey in February, coupled with the recently reported £175m. hole in finances, just why are the States allowing a loss-making airline to take delivery of two new aircraft costing a reported £37m.?,’ he said. ‘The government continues to pour taxpayers’ money into this bottomless pit, especially at a time when the aviation market is shrinking.’
Airport director Colin Le Ray said considering the longer-term trend, the current levels of passenger movements were not untypical for the first two months of the year. ‘In comparison, 2008 saw an unusually high level of passenger movements during February, which contributed to this year’s headline decline of 9% over the first two months.’
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Aurigny is costing us the best part of fifty million quid then. In all the years the states have owned it it has never made a profit. Completely the opposite actually.
I wish I could dream up a business where I could make substantial losses, year in and year out, safe in the knowledge that some sucker is going to come along and wash my face for me.
Once my equipment and plant is obsolete the same sucker comes along again and replaces that as well. Aurigny are well and truly sorted.
If only I could convince the CM that I have got something the Island could not be with out. I could sit back and relax until I retire. I bet the pension would be attractive to boot.
I’d say cheers to that. Who wouldn’t?
I very much doubt the airline would be worth enough to even cancel out its debts. But it is better to drop it like a hot potato rather than allow it to keep draining the cash at the rate that it has been.
I have no doubt we will hear stories that the CM has already signed contracts for these new planes and its a done deal already.
The best outcome would be for Blue Islands to take it over if they had the desire too. If anybody could make it work it would be Derek Coates. He seems to be our local version of Richard Branson!
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Its about time that the bosses at Flybe cut out this childish backbiting about Aurigny. Its all about destroying our confidence so that they can get a bigger share of the market, and all that goes with it. The only questions that I have are about Flybe’s ethics.
Looks like a case of ‘Dont do as I do….
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The reason the states bought Aurginy was to secure flights into and out of Guernsey at a time when all the other airlines were pulling out because the route loss making. Not sure much has changed and in fact the situation is probably worse. Seems like the states are in a no win situation, keep piling in funds to keep Aurigny up and running or pull out and run the risk that flights to the island dry up or remaining airlines drive up prices.
Not an easy one
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Let that bird go £50 million is a ridiculous
waste of money.
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Well said Paul. It would certainly be interesting to see what Blue Islands could do with Aurigny – they certainly couldn’t make it any worse.
I don’t mind giving money to Aurigny – when I fly with them. It raises my hackles however to think that some of my taxes goes to Aurigny when the vast majority of the time I choose Flybe.
Taxpayers money for public services, private investment for business.
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You know: I’m beginning to wonder if any of our so called politicians have a grasp of what the real world is like.
They act like the man with the golden Trousers; every time he put his hand in a pocket he brought out a gold sovereign
Therefore I think they should be told; because I don’t think they know it was a fairy tale, just like their way of life.
The only sovereign Guernsey has lives in England, and there isn’t much help from that quarter. so it is up to the people of Guernsey to put a stop to all this wasteful way of spending other peoples money.
Aurigny airlines was a gimmick, or if you like a Sacred cow. Prestige has cost a lot of money, Get rid of them now, and at the same time those in Office for worsening of Guernsey,
If you don’t rise up now it will get worse, let’s get back to OUR ways of conseillers and States who will listen to the people.
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Actually the new ATR’s cost 37 million dollars in a deal which was done when it was 2 dollars to the pound. So thats actually 18.5 million pounds which is not going to be paid back by the taxpayer. The loan for the two aircraft is paid back monthly and replaces the monthly leasing cost for two of the older ATR’s that are being returned to their owners.
It would help if Flybe got their facts right before going into a childish rant. They are europes largest regional airline and yet they feel the need to complain about a tiny local airline? If Guernsey ever becomes unprofitable for Flybe then they will have no hesitation in pulling their services and leaving us all high and dry.
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Why not give Blue Island a try thay are very good and know how to treat passangers
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Alright Ron Russell;
let them have a go; however make it abundantly clear that by no means what-so-ever, that finacial or other help costing Guernsey people any monies or material goods of any nature,
In other words unlike the ‘Reds’ You WILL walk alone!
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Let’s get a few things clear.
1. The States paid £5m to buy Aurigny in 2003, this gave them secure control over 4 pairs of Gatwick slots so that in the event of other carreirs giving up flying from Gatwick to Guernsey the Stastes would be able to guarantee a continuing service.
2. The States have authorised no further use of tax payers money since buying Aurigny, all monies Aurigny has received have been commercial loans guaranteed by the States. Aurigny has continued to service those loans.
3. Following a terrible year for aviation (2008) and the worst outlook for the industry in decades, Aurigny, like many other airlines is forecasting losses over the next year or two. Having never had any working capital allocated to it from it’s shareholders (The States) it is now in need of some, to ensure it can survive the downturn ahead.
4. In 6 years of States ownership Aurigny has:
Provided employment for 300 local tax paying citizens.
Paid over £12m in taxes and charges to Guernsey and Alderney Airport.
Carried 2.5m passengers, including over .5m tourists visiting our islands, thousands and thousands of businessmen supporting our economy and countless sporting teams between the islands. It has done this at fares that would not be available were Aurigny not present.
5. The new aircraft are not being bought by the tax paying public, the States is guaranteeing the finance.
6. flybe would not be moaning about Aurigny unless it was impacting on their profitability, which really means flybe wants to put their fares up, but can’t whilst Aurigny is competing against them.
7. If flybe were not operating profitably on their Guernsey routes they would stop doing them, so what they really want is to get rid of Aurigny and INCREASE their profits from Guernsey’s businesses and Guernsey’s people.
8. There are a few comments earlier about Blue Islands providing great customer service and Derek Coates knowing how to run a business. Derek of course does know how to run a business, but what you see in Blue Islands today, is how to run a business to put your opposition out of business. In a monopoly situation (inter island) who do you think would pay for unnecessary lounges with refreshments, expensive Jetstream aircraft, and buses to avoid 30 yard walks to/from the terminal?
It wouldn’t be Derek anymore, that’s for sure!
So is it really in Guernsey’s interest to lose control of Aurigny?
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What I find totally baffling about the Flybe / Aurigny situation is this; why on earth do the States use Flybe to transport patients needing medical treatment to the UK, when they could put them on their own airline and increase its profitability? Fair enough when patients are going to Southampton as Aurigny don’t go there, but if anyone needs to go to Gatwick surely they should go with Aurigny rather than Flybe? This must add up to a hefty sum over the course of a year.
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Paul: “I wish I could dream up a business where I could make substantial losses, year in and year out, safe in the knowledge that some sucker is going to come along and wash my face for me.”
Start a bank.
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Cracking points Raymond!
A lot of conclusions being jumped to here before the true facts are known, and the last people I would take facts from with regards to Aurigny, are Flybe.
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Mr Rutter of Flybe does not appear to have been furnished with an answer from our unanswerable States. Will someone step forward from whatever bland committee is responsible for siphoning taxpayers money into Aurigny and give taxpayers an answer?
And when will the States take a long hard look at bankrupt and expensive operations they continue to squander taxpayers money on?
We could start with ££££millions poured into Aurigny and then the bankrupt green elephants of the Bus Co to name but two glaring holes not to mention the airport itself with framed photo of that ‘populist’ man of the people Roger Berry OBE
Call me cycnical but watching these big spending Deputies blow public money on every non-viable uneconomic scheme (scam) for decades earns a certain cheesed off demeanour
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Firstly, Ray Chisholm has put forward the facts very succintly. Anyone with an ounce of doubt about Aurigny should read,mark and learn.
Secondly,in response to Phil’s comment about the medical flights, I think you’ll find that Capital Aviation at Exeter have a dedicated air ambulance and paramedics ready for medical flights, and much more.
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Raymond Chisholm,
So shall the States get involved in food retailing, property development and taxi hire to ensure we’re not being ripped off by private companies?
If Aurigny were making money surely the States could sell Aurigny as a (profitable you claim) going concern?
You say Aurigny was bought by the States “to secure the Gatwick slots”. We have Gatwick slots secured through Flybe. This was nothing more or less than he insidious establishment bailing out a private venture capital company with public money. £5m to be precise.
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Why don’t the States take over HD Ferries or charter one of the old Emeraude boats if they want to get into the travel business so much?
Now sea travel needs some anti-monopolistic attention…
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Working capital or otherwise, £6 million is 6 million. Having already paid £5 million.
As for merely being guarantors of the company’s borrowings, that simply risks £37 million being poured in after the previous 6+5 million.
If they are still making losses, presumably we are likely to have to “recapitalise” them again and again over the coming years. The guarantees we are making them are secured (presumably) over the wasting assets of the (not even owned – probably contract leased) aircraft.
It is possible to service debt without repaying any of it.
No doubt we are also guaranteeing (by this recapitalisation) the Aurigny directors’ salaries and pension schemes, too.
Had Aurigny disappeared, the demand for the services it provided would have been met by other providers, probably without a states handout. Maybe by Blue Islands, maybe by Flybe.
I’m more comfortable having all three of them around, but is it reasonable to shore up one company at the “expense” of the others?
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Oh dear, FlyBe not making enough profit then?
It looks like a smokescreen to me – how often have FlyBe but a route at the drop of a hat?
If Aurigny did not exist prices would double, and services would be sparodic.
I can’t say I agree with the choice of aircraft (ATR) however, as they should have gone for the Bombardier.
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Darren,
You count the cost of Flybe being in a monopoly position but don’t count the cost, as a taxpayer, of propping up Aurigny.
If above figures are correct (£5m + £6m in taxpayer monies) why don’t you add that to your Aurigny flight costs and see how that looks?
The States nationalised Aurigny at the very same time they were privatising Guernsey Electric, Post and Telecoms. It was the biggest act of hypocracy and U-Turn in policy after years of peddling commercialisation and stank like a fish as they pushed the purchase through in 12 days.
Only the States senior establishment can act like anarchists and a bull in the china shop setting aside rules and policies at the drop of hat and get away with it (Berry, Langlois, Morgan, Torode, Trott stand up to be counted). It was a shambles and still appears to be so.
Flybe has every right to complain about this zombie airline being continually propped up by taxpayers
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