Calls to stop air route subsidies

Wednesday 30 October 2019

Subsidised air routes such as Heathrow could be dropped when their funding expires if a "damaging" amendment to the States Budget is successful.

Deputies Mark Dorey and Emilie McSwiggan want the States to stop spending money subsidising new air routes until after a full review of the island's air links has been carried out.

"Connections to Heathrow and Cardiff are currently subsidised via the Future Guernsey Economic Fund," they said. "This practice of subsidising air links has been held responsible, in part, for Aurigny's growing losses – this will be verified (or disproved) as part of the coordinated approach to air links proposed in Proposition 38.

"Until that work is done, it would be wasteful to invest further money into an approach that appears to have a double cost to the States."

Earlier this year, Economic Development made a flat investment of £678,000 in the re-establishment of a Heathrow route, plus a £147,000 discount in landing and other charges for the Flybe-run service. 

Pictured: Guernsey's link with Heathrow was re-established in the Spring after more than 10 years. 

Further financial support was approved in September meaning the route would continue onto 28 March 2020. However, to some Guernsey is simply babysitting the airline's slots at Heathrow while they wait for more profitable routes to open up. 

Economic Development President Charles Parkinson countered the amendment by saying that route development support is a "positive and expedient" way of instilling new impetus into the economy. 

“It is important that Guernsey continues to invest in its economy in order to drive prosperity and growth – and in order to be able to pay for the excellent public services our islanders receive. Investing in our economy includes investing in our air links, a critical component of our economic competitiveness," he said. 

“The States has followed a policy of strengthening Guernsey’s air connectivity by a series of steps over the past year which includes supporting the establishment of a Heathrow link, agreeing to use route development support to put it in place, and agreeing that route development support is a positive, expedient and financially focused approach to enhancing Guernsey’s connectivity.

Pictured: Deputy Parkinson wants Deputies Dorey and McSwiggan to reconsider their "damaging" amendment.

“Reversing this positive investment now will not help our economy, and it will not single-handedly resolve Aurigny’s financial performance.

“Economic Development is supportive of Aurigny – as an island brand, as an economic enabler, and as an important local employer. However, the scale of the losses, and the apparent sudden increase in the losses, does need to be investigated by the Policy & Resources Committee’s planned review but we should not undermine our own competitiveness while doing so.

“I hope Mark and Emilie will reconsider this amendment, which while being well-intentioned sends a damaging message to our business community.”