Efficiency of Aurigny's business model to be scrutinised

Friday 22 February 2019

A joint review by the Scrutiny Management Committee and Aurigny's shareholder will investigate whether the States-owned airline has become less efficient over time.

The airline has continued to run up seven-figure annual losses since having its £19.9m. deficit up to 2015 paid off by the States in 2015.

Aurigny's management have forecast a £4.4m. loss for 2019, which would push the company's losses £16m. and bring the possibility of further re-capitalisation to the surface. 

Scrutiny President Deputy Chris Green told Express that a joint review with the States Trading & Supervisory Board would be one of his committee's major undertakings during the remainder of this States term. 

He said: "Jointly with the STSB we will be doing an independent review of the efficiency of Aurigny, which basically will be an assessment of the financial and operating efficiency of Aurigny as a business."

"There’s a risk with any publically-owned company that it loses efficiency over time and we need to have an objective assessment of how efficient Aurigny is."

Deputy Green said the risk of Aurigny becoming inefficient over time was on the radar of the previous Scrutiny committee and that this review would hopefully answer those questions.

Deputy Green, right, wants his committee's public hearings to focus more on specific issues so that they can drill down into more detail. The review of Aurigny's efficiency could be the focus of a public hearing this term. 

Deputy Green said it was crucial to understand exactly how Aurigny was operating as a business given its significant role to the island community.

He added: "It is an undoubted fact that Aurigny is going to be  a vital component in our connectivity going forwards. The States of Guernsey owns its own airline and there is no real appetite to dispense with it."