"Oversupplying routes does not serve the island well"

Monday 30 September 2019

Blue Islands has criticised Aurigny for its routes to Jersey and Southampton, saying the decision to compete with them does not serve the island well.

Earlier in the year, Aurigny launched these new routes, saying it could compete with Blue Islands with better flight times and more reliability.

This came following the announcement that the States would be subsidising Flybe to fly to Heathrow, but since, Aurigny have had to announce that its forecast losses for 2019 have jumped to £7.6m. The States-owned airline has blamed its fiscal woes on that subsidy and a very difficult market.

Speaking to Express recently, Blue Islands CEO Rob Veron took some time to offer some insight on to what the Channel Islands airline market was like at the moment, particularly with the new introduction of the quasi-open skies policy. 

"Blue Islands’ aim is to be a commercially viable economic and social enabler for the island, offering residents a wider choice of destinations and exposure to potential new visitors in different catchments, as opposed to entering routes that are already well served," Mr Veron said. 

Pictured: BI launched its Liverpool route earlier this year. 

In the last nine months, it has launched new routes to Liverpool, London Southend and Newquay. But Aurigny flying to Southampton and Jersey has put competition on to routes it previously was the sole operator for. 

"Blue Islands maintains that loss making oversupply of capacity on established routes does not serve the island well in the long-term and is already contributing to a challenging environment. We believe that using Guernsey’s Quasi Open Skies policy to directly compete with another operator on a route, while incurring substantial losses in doing so, is not the aim of the policy which is to drive sustainable economic and social enablement for islanders through a wider choice of destinations and access points," Mr Veron added.

"With an inherently limited island market and high operating costs, reducing fares on routes such as Guernsey-Southampton which already had excess seat capacity (circa 55,000 in 2018) in order to stimulate additional volumes on that route only incurs ever greater unsustainable losses. This has also resulted in significant market substitution and cannibalisation from Gatwick to Southampton. The same is true on the Guernsey-Jersey route where Aurigny has previously stated it withdrew its services because its losses were unsustainable."

Pictured: Blue Islands have also launched its own ground handling team. It used to rent the service from Aurigny. 

Over the last few months, rumours about Blue Islands have been circulating that its owner, Derek Coates, is looking to sell the business. His son, Tim Coates, tried to stamp on those rumours though, saying there were no plans for any sale. 

Mr Veron took this a step further and said the airline's new routes had all performed well.

"The Liverpool service achieved a seat occupancy of 86% in August, with 75% of those passengers originating in Liverpool and using the route to discover Guernsey. Feedback from our London Southend passengers is very positive, reflecting the low price point, ease of moving through the airport and convenient travel on to central London.

"We are equally delighted that all Blue Islands operated routes from Guernsey have seen passenger growth in 2019, and with no burden to the Guernsey taxpayer. Blue Islands’ positive trend is not mirrored across all routes from Guernsey where a decline in passenger numbers has been seen on some other services."

Pictured top: Rob Veron.