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Aurigny is going to ask the States for permission to buy three new ATRs for $60m., all of which are fitted with 'ClearVision' anti-fog technology.
The three new aircraft would improve reliability, and save the local airline just over £4.1m. over 10 years, it said.
It is arguing that it doesn't want to make the purchase just because of the technology, but because the current three 500 series ATR72 are up for replacement anyway.
What's so special about the potential new ATRs?
Aurigny's ATRs are used on the Gatwick route alongside the jet, and also the other UK routes. The current models are around 10 years old, and while they can operate for 20 years, Aurigny is hoping to save some money against the increasing maintenance costs and decreasing reliability of an older aircraft.
Although Aurigny has been bleeding public money for some years now, with projected losses for 2018 at £3.1m. and losses higher than £6m. in 2016, Deputy Peter Ferbrache, President of STSB, said the investment would be a positive one in the resilience of the island's air infrastructure, when air links were a significant concern.
One potential hitch in Aurigny's plan is that the new 'ClearVision' technology has not yet been certified by the boards in the EU that it needs to be approved by. But if it is certified, the system itself is expected to save the airline £1.1m. because of its ability to reduce disruption caused by fog.
But, if the tech is not certified, Aurigny can refuse to accept the new aircraft, as per the contract on the table. And if they are already delivered, ATR has agreed a package of damages payable if the system is not serviceable.
Aurigny's estimated savings in its business case.
The States’ Trading Supervisory Board (STSB), which has responsibility for oversight of Aurigny, is backing the proposals, and will ask the States to guarantee a loan to reduce the cost of financing the purchase.
This will all be put to the States by STSB with Aurigny's business case and an independent report into the potential purchase which was commissioned by the committee.
It is all expected to be debated in the States' December meeting, and if approved, the aircraft could be flying to and from Guernsey by the second half of next year.
Deputy Peter Ferbrache's committee, the STSB, are presenting Aurigny's business plan in its December policy letter, after it internally voted to support it.
President of the STSB, Deputy Peter Ferbrache, said: ”[We] have undertaken a comprehensive assessment of the proposals, which has included not just a review of the business case itself, but also an examination of Aurigny’s wider fleet, possible changes to its future operating model and alternative aircraft options.
"While the business case clearly demonstrates that there will be financial benefits for the airline from its proposed investment, the STSB also believes that the plans represent a positive and significant investment in the resilience of the island’s air transport infrastructure at a time when security of air links is a significant concern.
”The STSB also commissioned aviation specialists, PA Nyras, to review the business case and provide some independent external assurance. They agree that, with the terms on offer, it makes sense to replace the aircraft at this point in time, rather than deferring, and that the optimal approach is to purchase the new aircraft, rather than lease them. Their view is that the terms agreed by Aurigny with ATR, which includes buying back two of the existing planes, represent a good offer in the current market and they are supportive of the businesscase’s recommendations.“
A test ATR with the ClearVision system fitted which visited Guernsey as a demo earlier in the year.
Subject to its certification, the new 600-series ATR72 aircraft would be equipped with a new system called ‘ClearVision’, which enables aircraft to operate in lower visibility conditions.This will reduce the disruption due to fog. Of the total savings of £4.1m. the new aircraft will generate, it is estimated the ‘ClearVision’ system will save the airline £1.1m. over 10 years as a result of further reductions in delay and disruption.
The tech sees a camera mounted on the front of the ATR, which is hooked up to a set of goggles the pilot can wear. In basic terms, the camera essentially provides night vision for the pilot to see through some degree of fog, and therefore makes a normal landing, despite conditions which would normally prevent that.
The tech was shown off as ATR visited the island earlier in the year, read more about that here.
In addition to the anti-fog technology, the new series-600 aircraft also have more capacity for carry-on luggage, which will be an improvement for customers booking lower, cabin baggage only fares.
The opportunity will also be taken to consider applying an updated livery to the new aircraft that promotes Guernsey more strongly and visibly. This can be undertaken at very little additional cost, as their purchase price includes provision for the painting of a specified livery. The Embraer jet would be the only other aircraft that would require repainting, but this would only be scheduled for when it was next due to be repainted as part of its planned maintenance.
Aurigny's Chief Executive, Mark Darby, said the airline was delighted that both STSB and Policy & Resources had given their support to the idea.
Guernsey's Policy & Resources committee have joined STSB in giving their backing to Aurigny's business case for these ATRs, which the airline's Chief Executive, Mark Darby, said was great news.
"We have worked incredibly hard to secure the best possible terms for Aurigny, the States of Guernsey, and the Bailiwick. We are pleased both committees recognise that this is an attractive deal, which takes advantage of very favourable market conditions, and will significantly improve the airline’s financial position," he said.
“First and foremost, the business case makes sense from a fleet renewal perspective. Not only will it significantly reduce both planned and unplanned maintenance costs, it will also improve the airline’s overall service reliability and in turn reduce delay and disruption costs. In addition, there are a number of other benefits that this deal secures; not least equipping the aircraft with the latest state-of-the-art enhanced vision system, ClearVision, to reduce disruption during fog and poor visibility.
“The opportunity to be launch partner for ClearVision is extremely exciting for Aurigny and we believe it will be a real game changer for Guernsey. For us, that is the icing on the cake.”
The future of Aurigny’s smaller Dornier aircraft, which operate to and from Alderney, will be determined once a contract has been awarded for the Alderney route. That will be under a new Public Service Obligation arrangement, which will provide direct States funding to an airline to run the loss-making service. Aurigny is expected to submit a tender.
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