WITH the dust starting to settle on the aborted attempt to ‘sell’ Aurigny to Blue Islands, it’s time to consider some of the fallout from the whole episode.

The repercussions are threefold. Firstly, the political ramifications. Secondly, the impact on both airlines involved. Lastly, the lessons to be learned about the process of licensing Guernsey’s air links.

Let’s start with the politics. There is no doubt that the whole process has been very poorly handled. There can be no fault laid at Treasury and Resources’ door for considering seriously any external offer to buy our – currently – loss-making public airline. The criticism is more that it announced the proposed purchase, incurred costs and damaged Aurigny before pulling the plug for reasons that should have been apparent from the outset.

T&R has made clear that it’s withdrawn from the sale because of the small – but unacceptable – risk to our Gatwick slots and the uncertainty over the profitability of the merged airline. How much better it would have been if it had simply taken advice on these matters confidentially as soon as it received the approach from Blue Islands. Once it had received the expert advice and decided the risks outweighed the benefits, it could have turned down Blue Islands’ offer quietly with little adverse impact.

I wonder what the real reason is for the sudden change of heart by T&R, from a driven desire to flog off Aurigny to suddenly taking it off the market? Surely it can’t really be the risk to the slots, as it claims, because it must have been conscious of that from day one. Is it more the realisation it was likely to lose in the States? After all, treasury departments need to enjoy the confidence of the House. Perhaps after its major defeat over plans to borrow large sums from external sources, yet another bruising rejection was just too much to contemplate?

Moving on to the impact on Aurigny and Blue Islands, here again the publicity has undoubtedly been damaging for both. In Aurigny’s case its reputation has been damaged by its owners portraying it as a basket case and by the whole poisonous atmosphere of uncertainty. Hopefully, that mischief can be repaired in time.

What is even sadder is that the voluntary cooperation so desperately needed between the two airlines to rationalise capacity and reduce operating losses for both companies now seems less likely than ever. Such has been the heightened tension which this very public process has engendered that it’s almost as hard to see Aurigny and Blue Islands reaching a modus vivendi as it is to imagine an early settlement between Israel and the Palestinians.

One can only hope – in both cases – that those obstacles can be overcome. If they are not, then we face the desperate prospect of a game of chicken between the two Guernsey airlines.

Both will continue to lose money hand over fist on the inter-island routes, waiting to see who will blink first. In other words, who has the deepest pockets – the taxpayer or Derek Coates? A nightmare scenario.

The last aspect that needs to be looked at is how we got into this mess. T&R is right to say that one of the problems it was trying to resolve with the merger was the chronic overcapacity on the Guernsey-Jersey route. The irony is that this problem was created by another States department granting a second licence on the route when it was clear the traffic didn’t exist to sustain that level of competition.

Why did it do that? Put simply, because the States both owns an airline and licenses Guernsey’s air routes, it is petrified of doing anything that could be interpreted as favouring its own company. As a result, it leans over so far backwards to be fair to Aurigny’s competitors that it actually makes perverse decisions. That is why the whole licensing process should have been taken out of the States’ hands years ago.

The latest news on that front is that plans to shift responsibility for route licensing to the OUR have been delayed because of cost concerns. But why does the licensing authority have to be either the (compromised) States or the (expensive) OUR? Surely a simple independent panel could be charged with considering applications. Its guidelines would be to not be influenced either by competition for its own sake or by protectionism, but rather by sustainability and the long-term best interests of the travelling public.The licensing process should not be for the States to decide, says commentator Peter Roffey. (Picture by Adrian Miller, 1021925)With the Bluerigny decision no longer up in the air, Peter Roffey reflects on the consequences for the States and both airlines involved – and how the adverse impact could have been avoided‘Such has been the heightened tension which this very public process has engendered that it’s almost as hard to see Aurigny and Blue Islands reaching a modus vivendi as it is to imagine an early settlement between Israel and the Palestinians’