New CEO reveals plans to make States-owned airline more efficient

Friday 11 December 2020

Improving efficiency lies at the heart of the new Aurigny CEO's plans to make sure the airline is "not a drain on taxpayers' money" in the future.

Nico Bezuidenhout moved over to the island earlier this year and has been shadowing the outgoing CEO Mark Darby ahead of taking over at the helm of the business.

Mr Bezuidenhout's high-flying career in aviation has seen him serve as the CEO of Fastjet PLC, a London-listed airline established and operated under brand licence from the Easyjet founder Stelios Haji-Ioannou, and as the CEO of Mango Airlines, which he founded in 2006 as a subsidiary of South African Airways.

He headed up the budget airline for a decade and says it gave him insight into the challenges and demands of running a state-owned operator.

"Aurigny is a small but complex airline which plays such an important role to the economy and community," he said of his new role. 

"I think the expectations are not too different to the expectations that exist towards most state-owned carriers – to not be a drain on taxpayers’ resources and, for Aurigny, to provide a lifeline service in and out of the island."

Pictured: Mango Airlines, the company Mr Bezuidenhout founded as a subsidiary of South African Airlines, describes itself as a "low-cost carrier" committed to "innovation and convenience".

One of the greatest challenges the airline faces is one of scale, and it's the background against which the airline lost almost £10m in 2019 before the coronavirus hit. As a result of the pandemic, the airline is now expected to lose around £24m this year, according to figures announced by Policy & Resources President Peter Ferbrache. 

There is a balance to be struck, he says, between the need for greater profitability and the potential for lower fares. At the heart of both is the need for better scale and driving efficiency. 

"Every islander is a stakeholder and that leads to greater expectations," he said. "The pandemic has proved that Aurigny’s place in Guernsey is more important than ever. It is not a capitalistic love affair, it is a deep-rooted social relationship.

"We should not be striving for supernatural profits - the current market construct will make it incredibly difficult. The construct that existed in 2019 would not deliver these results, so the airline has to be able to gain some level of scale. Whether you extend the runway or not, whether you have open skies or not, none of that on its own is going to do that.

"The question is can Aurigny be efficient, effective and cannot it at least not be a drain on taxpayers' resources? It is my job to achieve that - that is what I am here to deliver."

Pictured: Mark Darby has headed up the States-owned airline since 2013, but decided in February that it was time to retire. Mr Bezuidenhout shadowed him closely in recent months and has now officially taken over the reins. 

Deputy Ferbrache said last week that he viewed the airline as an "economic enabler" and that it would not be able to make a profit "in a million years".

It's a challenge that Mr Bezuidenhout accepts. 

"When I started Mango Airlines, South African Airways had become loss-making and [Mango Airlines] was met with a fair amount of scepticism, but it was profitable for the first eight of my ten years in charge.

"It does not follow that because you are state-owned, you cannot be profitable."

 Navigating the effects of the pandemic will be critical to that. 

"To an extent, demand patterns have irreversibly changed," said Mr Bezuidenhout, referencing business travel and proof that people can now attend business meetings remotely because of technological advancements. 

Pictured: Mr Bezuidenhout said he does not see any great reason to change the relationship with Alderney, which he says is served by young Dornier aircraft. 

"It is undeniable that the impact of that has been far greater than any single event in the airline industry since the Wright Brothers."

He is cautiously optimistic that Guernsey's airline is in a better position than discretional, cross-continental carriers. He believes that short-haul, point to point carriers will bounce back the quickest. 

As for his predecessors, he says the groundwork is there to help better a positive future and make the next chapter in Aurigny's history a positive one. 

"A lot of the hard yards have been covered and the operating fleet is a relatively young one with the new ATR 72-600s."

"A lot of work has been done on professionalising the airline and putting a strong focus on the customer. I am cautiously optimistic for the future and I am pleased to be here."