Aurigny loses £9.7 million in 2019

Tuesday 15 September 2020

Guernsey's taxpayer-funded airline is now relying on an overdraft facility, loans worth tens of millions of pounds and various forms of asset financing, after it nosedived into further debt in 2019.

Aurigny's accounts ending 31 December 2019 show that the States-owned airline is now £19,811,650 in the red following another year that saw its costs outstrip its revenue by almost £10m.

Operating losses of £7,564,604 played a major part in the downturn in Aurigny's finances, compared to -£1,870,595 in 2018.

Pictured: Aurigny's operating losses in 2019 compared to the previous year. 

The Cabernet Group, whose accounts were audited by BDO Limited, said a number of measures have been taken in order to continue operating despite "sustained losses". 

"The company and its 100% subsidiaries, Aurigny Air Services Limited and Anglo Normandy Aero Engineering Limited, have historically operated with a combination of third party and States of Guernsey debt and asset financing," they said.

"The group has continued to sustain losses in recent years and therefore the directors have taken the following action:

• secured a revolving credit facility of £25.7m with a commercial bank which is supported by a guarantee from the States of Guernsey;

• secured a working capital overdraft facility of £1m with a commercial bank, supported by a guarantee from the States of Guernsey;

• secured credit and loan facilities with both the States of Guernsey and a commercial bank (with the States of Guernsey acting as guarantor) for the purchase of aircraft;

• sought written confirmation from the Policy & Resources Committee of the States of Guernsey that it will continue to make available financial support for the foreseeable future to meet the Group’s debts and obligations as they fall due."

Pictured: Aurigny took out almost £50m worth of loans in 2019. This is linked to the £46m purchase of three "fog-busting" Clear Vision-assisted planes which are yet to be deployed.

In March this year, the States unanimously agreed to make a further £27m available to Aurigny by way of a temporary overdraft facility, in light of the impact of the corona virus pandemic on Aurigny's commercial operations. 

This was based on a "reasonable worst case” scenario that due to travel restrictions, Aurigny would be unable to operate any flights other than the current lifeline routes for the remainder of 2020.

The financial accounts detailed how Aurigny, as a States-owned airline with "extensive financial support" had a layer of protection from the Covid-19 crosswinds. 

Pictured: Aurigny has been providing lifeline services between Guernsey and Alderney during the corona virus pandemic. 

"As Covid-19 and its consequences are new and untested circumstances, it is not possible at this time to assess with confidence what the medium, or long term, impacts of Covid-19 may be on the group, or if these will be negative or positive.

"Whilst the full consequences of the pandemic and its effects cannot yet be known, the group believes that its business model as a state-owned community airline with extensive financial support continues to offer a significant degree of protection in an adverse economic environment."