Focusing on reliability

Sunday 14 April 2019

With the States of Guernsey making a decision to adopt an ‘open skies’ policy last year, the nature of airline operations in and out of the island was inevitably set to change, but where has that left the island-owned airline, Aurigny?

One of the early changes is the return of the Heathrow route with Flybe – the first time Guernsey has had a direct flight there for 20 years - which island authorities are welcoming with open arms, and a heavy subsidy.

Aurigny’s Chief Executive Officer Mark Darby (pictured above) sat down with Connect to give his reaction and to discuss Aurigny’s own plans.

He has been in post since 2013, and has guided the States-owned airline through a market that is becoming ever more hostile. But the future could be bright for Aurigny. It may have not secured a link to Heathrow, as its competitor Flybe has (with generous backing from the States), but it has announced two new routes – to Jersey and Southampton.

These new routes are the first to take advantage of the opportunities presented by open skies, as Aurigny will be competing with Blue Islands on both. But Mr Darby believes they are going to be able to apply a couple of things they have learnt from the last few years to make them a success.

The foundation of that plan is reliability, something Aurigny has worked hard on,  such as investing heavily to get its own infrastructure on the ground.

“Gatwick is the cornerstone of the island’s connectivity, so we focus on it the most. We have invested a lot in it to get a base set up there, but given its importance to the island it was a good investment. 

“We are always going to be the smallest operator [at Gatwick] so it was the only way to ensure we weren’t treated badly. Even at six flights a day we are only 0.5% of the air traffic they deal with, but with our own handling team we have people on the ground who give us the means to manage the process a lot better. Reliability is key, as it’s a lifeline service.”

Gatwick is the only profitable route for Aurigny, but that income could potentially take a hit with the recent announcement of a new route to Heathrow.

Deputy Charles Parkinson’s Economic Development team has announced it will be subsiding Flybe with £825,000 – a mix of cash and discounts – to operate a daily route to Heathrow for seven months. Alongside Gatwick, Heathrow is one of two main airports in London, with the former being more crucial for European links, but Heathrow having more long-haul links. So while Aurigny has always had the competition of smaller routes against its Gatwick flights, it will now have to deal with more serious competition over the summer.

What effect will that have? That is yet to be seen, but Mr Darby said he wasn’t too worried for a number of reasons: “It will take traffic away from us, we don’t know how much, but at the same time the whole market has changed, so we have got Southend, Southampton. Our own operation to Southampton will change the market. The proof now is in the pudding. The States have decided to do it, fine, but we will see how successful it is by counting the passengers that get on the plane and off the plane. That is going to be the test,” he said.

“I wouldn’t necessarily say Heathrow is that convenient either. It is a great airport, but it is a complex airport for the user, with all of the terminals it has a complexity that you haven’t got at somewhere like Gatwick. 

“The bulk of people that travel off island are connecting to European destinations not to long haul, so therefore the connectivity out of Gatwick is probably superior and easier to access than it is to go to Heathrow.”

Aurigny did say it had asked Economic Development for a subsidy to fly to Heathrow itself, when the announcement was made. That was not accepted by the States committee though. ED has listed a number of reasons for that decision, but retrospectively, it wasn’t a huge loss, according to Mr Darby.

“All we were offered was a very limited set of slots, we knew that we would just be baby-sitting the slots for a very limited period,” he said. “I think there is a whole world of difference between slots that allow us to develop a market on that route, to a short-term baby-sitting operation. So, to us it made no commercial sense and that is why it needed as subsidy.

“As we have said recently, we won’t change anything that we do at Gatwick, because why would we? If we knew the route to Heathrow was going to be there for 10 years, we would have acted differently, but they absolutely won’t be.”

But the reliability Aurigny has developed through Gatwick is going to be the key going forward. That is what Mr Darby believes will bring Aurigny from millions of pounds lost a year to a break even point – the objective set of Mr Darby by the States.

“We are charged by the States to be an economic enabler, so they don’t want us to make a profit, but they don’t want us lose money either. Talking to business leaders they want that reliability of service,” he explained.

“We announced the Jersey and Southampton routes because we felt that good connectivity to those destinations was really missing from the island. We feel we are better placed to be able to offer a good and reliable, quality service, and that is the way we are pushing it. 

“Where we are able to differentiate on the Jersey route in particular is better timing. We are focused on providing good reliable routes. That is why we are not operating on the weekend, because there is already plenty of capacity there, but the options and reliability are missing during the week.”

This, alongside Aurigny’s ability to keep the aircraft located in Guernsey, which will also help reliability, should allow it to operate a much more regular service which people get used to, and use more often.

He added: “There has been plenty of choice – frequency – of the services, but that lack of reliability means you don’t bother using them in the first place. Whatever the cause is, we think we can offer that better service. We are not trying to be arrogant but, in this situation, we think we probably can. If you look at the timings they are not just there by accident, they are there deliberately to be the best they can be. 

“We will be really focused on getting that technical reliability up to make the routes the best they can be.”

“If you stand back a bit you can see there is lots of change happening, whether it is due to open skies or other factors, but this business is always moving, it rarely stands still for an extended period. So the last few months we have seen quite a lot of announcements – there has been all the stuff around the uncertainty of Flybe, there has been route announcements by Blue Islands and then Heathrow – so you put all of those together, plus our own announcements, customer choice has rocketed. That is good.”

This article first appeared in Connect magazine, which can be read online here.