Aurigny looks at fog defying technology

Wednesday 13 June 2018

Aurigny has released its 2017 annual accounts, which confirm another financial loss - but also detail improvements made to the airline's services along with further planned enhancements.

Those planned enhancements could come about due to improvements in available technology, which Aurigny has said "could make a significant difference locally," particularly on days where the Bailiwick is struck by fog.

The cost of weather-related disruption was described as "high in 2017," with more than 60 days of disruption throughout the year which added to the airline's losses, including knock-on effects.

Now, Aurigny has said "looking ahead, aircraft installed technology solutions – enhanced vision systems – are becoming available on new aircraft and could make a significant difference locally."

A statement from the airline, which was released to support the 2017 annual accounts, said:

"We are in discussion with aircraft manufacturers and hope to be able to report shortly on developments in our fleet. Future investment in new aircraft will ensure we have a fleet that is fit for purpose for future operations and would significantly reduce scheduled and unplanned maintenance costs. Overall, we would anticipate significant savings over the next 10 years from the investment in new aircraft."

That statement was backed up by Aurigny Chairman Andrew Haining, who said: “The Board, management and staff of Aurigny continue to work hard to improve the service we offer customers.

"Important initiatives in systems development, staff development, and fleet upgrades will hopefully enable us to build on the progress made in 2017. At the same time, we have to remain responsive to the strategic objectives of the community; our shareholder and our major customer.”

If the technology allows, and funds are available for future investments in the fleet, days like this could be a thing of the past...

Pictured: An article published by Bailiwick Express in February 2018

During 2017, fog affected Aurigny's flights at Guernsey Airport on 47 days, and even more days at Alderney Airport. That meant visibility was below the airline's minimal landing requirements. When other meteorological conditions were also factored in, passengers suffered more than 60 days of disruption including knock-on effects.

In his Chief Executive's report, Mark Darby said "we continue to work hard to minimise the disruption to our services which the challenges of operating in these extreme weather conditions brings. We maintain back-up aircraft in our fleets and standby crews to fly them, enabling us to recover as swiftly and smoothly as possible from weather related delays."

However, he said this "high level of resilience comes at a cost, which airlines flying in other, less challenging places, don’t have to bear."

Mr Darby also said that when you add in the cost of looking after passengers who are delayed (hotels and transfers), the costs are very significant. But looking  forward, there could be some clearer days on the horizon as "aircraft installed technology solutions – enhanced vision systems - are becoming available which have the capacity to change  things for  the  better for Guernsey."

He said; "Aurigny  has the  inhouse  skills, experience  and  capability to capitalise on these opportunities as they become available on new aircraft," adding that Aurigny is "in discussion with aircraft manufacturers and hope to be able to report positively on developments in our fleet in 2018."

The enhanced vision systems which Aurigny is referring to are installed on board aircraft, therefore it would be the States of Guernsey's owned airline which would have to invest in the developing technology, and not either of the Bailiwick's airports.

Mr Darby said that is already a consideration, and it could bring other benefits too; "future investment in new aircraft will ensure we have a fleet that is fit for purpose for future operations and will reduce the significant risk and unpredictability of maintenance costs that are associated with older aircraft."

Pictured: Part of the Aurigny fleet

Within the 2017 annual accounts and report, Aurigny said it marked a year "in which the airline made important progress in several key areas of the business."

Aurigny said during 2017, the Board and management "took a number of decisions to improve the performance of the airline, both financially and in the service we offer customers."

The financial losses recorded by Aurigny during 2017 have already been released publicly, through the States of Guernsey's own accounts. Aurigny has now confirmed revenue for the year stood at £44.68m, which it has said was in line with the previous year.

The airline's overall reported loss for the year was £5.19m - "almost £2m better than forecast midway through the year."

The decision to cut the London City route is referenced throughout the report. The airline's Finance Director, Chris Simpson, said passenger revenues were down £0.39m during 2017, which he said is "mostly due to the closure of the London City route in Q4."

Mr Haining said; "undoubtedly, one of the biggest and most difficult decisions of 2017 was the decision to end the London City route, but it must be remembered, there were several reasons behind this move, not least the need to improve the financial performance of the airline."

Pictured: Alderney Airport

Aurigny also sought to again confirm its commitment to the Alderney market by comparing the statistics for Guernsey and Alderney passenger numbers and revenues. This also puts a spotlight on the losses incurred by the airline on the Alderney route, compared to the arguably more profitable Guernsey routes.

The Finance Director's report said the Aurigny business in viewed as two operating segments: the Guernsey network and the Alderney network.

Mr Simpson said 90%  of  passengers in 2017 flew  on Aurigny's core Guernsey operations, "representing 91%  of the airline's passenger revenues and generating a positive EBITDA (Earnings before interest, taxation, depreciation and amortisation) contribution of £3.1m, but recording a loss of £1.9m over the last year."

He said the airline remains "committed to the provision of the lifeline Alderney service: this is underscored by the fact that in 2017, approximately 40% of our flights were flown on the Alderney network whereas it represents only 10% of our overall passengers and 9% of our passenger revenue, generating a negative EBITDA contribution of £2.3m and a loss of £3.3million in 2017."

The full 2017 Aurigny annual accounts and report can be read here.

Pictured top: Fog at Guernsey Airport, February 2018