Aurigny for Sale

[Charlie Fox]

See Local News (http://www.thisisjersey.com/news/news3.html). Further news here (http://www.thisisguernsey.com/code/shownewsarticle.pl?ArticleID=012325)

[RVR300]

Not good news!!

[WOWBOY]

Who do you think would buy them??

[Meeb]

Rockhopper...?

That should put the cat amongst the pigeons on this thread... ;)

[circseam]

So a council buys an airline to protect routes from the island, then realises it costs alot to run an airline on these routes....so slashes costs, cuts routes (which were meant to be protected) and then finally puts the airline on the market, probably at a loss!

Sounds like most councils doesnt it!!

Good luck to all

[slj]

Was it sensible to for Aurigny to engage in a full frontal attack on Flybe on the GCI LGW route (after BA pull out in 2003), especially when moving schedule from the previous BA times that meant two aircraft from competing airlines often leaving GCI or LGW at about same time and with Aurigny using prop aircraft against the established airlines jet aircraft? (Customer perceptions often favour jet over prop aircraft)

Was scatter gun approach to opening (and closing) new routed driven by overconfidence in having States of Guernsey in background with extra cash if it were needed? Or was it driven by a desire to kill off competition?

Interesting hearing both Aurigny and Rockhopper Chief execs talking about their airlines. Rockhopper guy used “we” and “our” to describe business whilst Aurigny man frequently used “I” and “my”. Now that’s something for the soft management skills pundits to consider.

Al in all a nice niche market operator losing way.

[TheOddOne]

I must have missed something here - I don't believe that merely owning an airline will secure slots, they must be flown or will eventually disappear. We've seen operators flying GA aircraft to protect slots for 747s in quiet periods in the past.

I'm sorry to see this airline apparently not doing so well, I've enjoyed the odd inter-island flight with them and they've been regular night-time visitors with us over the years. I thought the ATR operation would have gone well enough. Government at all levels has a terrible track record of involvement in aviation.

Is it too simplistic to say that if not enough people are prepared to pay what it costs to fly from Guernsey to Gatwick, that there's no rational reason to keep the service going? Can anyone furnish a justification for subsidy on this route?

Cheers,
The Odd One

[FLYboh]

From www.thisisguernsey.co.uk

Rockhopper wants to take over Aurigny
by Nick Mann



HEALTHSPAN, the major investor in local airline Rockhopper, is in the running for rival Aurigny.
But the troubled States-owned airline’s own management would not consider a buyout.
Other industry sources were yesterday tight-lipped about any possible involvement.
Treasury and Resources has asked parties, including established airlines, whether they are interested in taking over all or part of the business.
The States has been advised that slots at Gatwick, the driving force behind the purchase of Aurigny in May 2003, are guaranteed without having to operate an airline.
‘Healthspan is our major external investor and it has been approached by the States of Guernsey – we’re now considering our next step,’ said Rockhopper chief executive Noel Hayes.
‘Together we have the local knowledge, staff, infrastructure and commitment to really deliver for islanders.’
Mr Hayes said that if left as the only operator on any route, the airline would be prepared to put in a service level agreement, guaranteeing fares and frequency.
‘We’re island-owned and island-based businesses and we will be focused on providing our customers with the right service and the right price,’ he added.
‘That may best be done by getting involved in any sale of Aurigny or simply just continuing with our own very successful formula.’
He put Aurigny’s problems down to overexpansion, rather than competition from his airline on the Alderney-Guernsey route.
In the last two years Aurigny had opened and then either closed or reduced capacity on Guernsey to Bournemouth, East Midlands and Bristol, he said.
The same had happened with Jersey to Manchester, Stansted, Bournemouth and Bristol.
‘In doing so they have neglected their core business of giving local people a good service at the right price on local routes.’
Both Flybe and CI Traders, which have also been linked with Aurigny, declined to comment.
Aurigny managing director Malcolm Hart believed the review of the ownership structure reflected best management practice.
‘I would not consider a management buyout of Aurigny,’ he said.
‘I see no way that could produce the 25% rates of return that venture capitalists need to launch a management buyout.’
He added that this was true of any airline operating in today’s climate and was unable to predict what any future structure of Aurigny might be.
The airline’s staff were informed of the development in the company’s monthly newsletter, issued yesterday.
‘I have confidence that when the States is asked to make a decision about future ownership of Aurigny, it will take the decision with the best interests of the company’s staff and their well-being in mind.’
Mr Hart added that the invitation for expressions of interest in Aurigny and the associated Anglo Normandy Aero Engineering were provided for in the May 2003 policy letter when the States bought them.
‘That decision was taken, the slots were saved and the consolidation process is now complete.
‘The States will now weigh up the benefits of continued public ownership against possible private sector alternatives.’


Published 22/12/2004

[Ayline]

I reckon Aurigny's problems are down to a number of reasons:

1. The Guernsey-Jersey route has become too expensive (£85 full fare day return).

2. The Guernsey-Jersey schedules were reduced in the Summer of 2003 to just 8 on weekdays, 5 on Saturdays and 4 on Sundays on a route which in the past saw about 20 flights per day. The service has since been increased and is now running at about 12-14 flights per day on weekdays. Guernsey people like to fly over to Jersey for the day to do shopping, play sport etc. - this requires an early departure and a late return. On some Saturdays in the Summer the first flight (and sometimes only flight) departed at 0930 with the last flight back at 1800. This compares to the 1980s and 90s when it was possible to take a 0730 departure and a 1930 return flight. Aurigny faces competition from Condor (the sea carrier) which charges approx £23 for a day return fare with the ferry leaving Guernsey at about 0950 and returning at 2040. The Airports in both Islands are open until 2100 so surely it would have been possible to offer passengers a longer day.

3. The Guernsey-Stansted was operated up to 4 times a day. The aircraft was suddenly switched to Jersey leaving Guernsey with 2 flights a day operating in the middle part of the day. The Guernsey service is reducing to 1 flight a day for next year. This will do nothing to attract businessmen or indeed lesuire pax who wish to connect with other flights at Stansted.

4. The Dinard Service was operated 2-3 times a day. First flight leaving Guernsey at 0820 with the last flight returning in the early evening. This is changing to 1 mid day flight next year. Another route which will probably suffer a big reduction in pax as a result of the rescheduling. This has been a twice daily service for many years and has allowed locals to have short breaks and long weekends in France. A mid day service is hardly convenient especially as the direct car ferry sailings to France were recently terminated. Aurigny should be increasing services as a result not reducing them.

5. Why operate a Bournemouth Service. This is not a high density route. Rockhopper were already operating daily flights to all 3 Islands from Bournemouth but Aurigny decided that it would compete on the Bournemouth-Jersey and Bournemouth-Guernsey routes. Why not leave this route to Rockhopper.

6. Why did Aurigny start regional services from Jersey. The airline was purchased by the States of Guernsey to protect airlinks from Guernsey. How about the Jersey-Manchester route - that was in competition with both BA and BMiBaby using jet aircraft (146s/737s). The SAAB 340 is hardly an attractive alternative. The Jersey-Bristol route started last summer was in competition with no less than 3 airlines: Air Southwest (albeit via Plymouth), Flybe (using Dash 8 400s) and BA (using ERJ-145s).

7. Too many different types of aircraft being used. Trislanders, Shorts 360, SAAB 340 and ATR-72s. One of each of the latter three types were usually parked up to act as a back up. The Trislanders + one other type would have meant that only one aircraft would have been needed to act as a back up (Trislanders excluded). A mix of ATR-42/72s may have been better. On some routes the ATR-72s were probably too large.

And finally when Flybe suggested that it might operate from Guernsey-Manchester Aurigny threatened to start Guernsey-Southampton and Guernsey-Birmingham routes in completion with Flybe!

[Jet2LBA]

I think many of us saw trouble on the horizon when the States of Guernsey decided to take control on Aurigny. Just like most state-run airlines, it has struggled financially. Only the airlines which are run as a true business generally prosper.

I know that the States of Guernsey had the Channel Islands best interests at heart when they decided to move in for Aurigny in 2003, but the airline has become too fragmented to make any money.

The inter-island ops are vital and should be the priority. Flybe have cried time and again their commitment to GCI and are in a much stronger position to evaluate new services from GCI than GR were. LGW will always be served by BE so there is no need for GR to fly the route if they aren't making money on it. BE would also no doubt move in to serve MAN if GR didn't make money on the route either.

As has been mentioned before, there are too many aircraft types being operated too. I agree that the Trislanders should operate a high frequency GCI-JER service as well as the other island hops and perhaps 3 ATR42/72's would be sufficient for LGW/MAN services if these routes do actually make money for GR. I think the Saabs are on the way out anyway and so the third (backup) ATR could operate any peak GCI-JER flights which the Trislanders were too small for to also enable the Shorts 360's to be sold.

[caa19]

I think 'Ayline' is absolutly spot on with the comments.

Consider if you will...
MAN - GCI with GR £205 'low' weekday return in Feb
MAN - NYC with BA £209 return in Feb (promo fare)

I know there is a lot of money in the CI but I know where Id rather go!

Some of the crazy things going on down there include the dropping of EMA-GCI even thought it was 128% up summer 2004 with daily flights - sounds daft but I guess its the profitbability thats important.

We must not forget that the ATR72s were financed by the States of Guernsey. However a much wiser investment would probably have being in extending the runway (if flybe ever do get 319s or 737s then they wont be able to operate from GCI).

Personal opinion... let flybe concentrate on the big stuff e.g. LGW, MAN, BHX etc and let GR and AX bring some competition to the intra-island and south coast and get the prices down and frequency up.

[slj]

JET2LBA

Aurigny was bought by the States of Guernsey with the proviso that the airline was operated as a private business with the existing management, albeit supposedly strengthened by the appointment of an ex banker as chairman.

The origninal intention was to have no States involvement. This however has only changed when it became obvious that things were not quite right at Aurigny.

It seems that the private sector management have much to answer for and if the States of Guernsey is to be blamed it is for letting the previous management run the business with too little control.

The hands off political involvement only changed when it became obvious that Aurigny was not performing as it ought to.

[Trislander]

CAA19,

You may not be aware that Rosedale Holdings, owners of Walker Aviation who in turn own Jersey European Airways (t/a flybe.) are a Channel Island company and are based in Jersey.

It is therefore in their interests to keep a variety of routes out of the Channel Islands, as they have done for the past 20 years or so.

It's their commitment to new routes and lower fares from/to the Channel Islands which keep the island's tourist business alive.

Tri :ok:

[caa19]

Trislander

Absolutely... it was JEA afterall! Spoken to a few people from flybe recently but the main focus there seams to be France... and hence the expansion (from the mainland) backend of 2004 - wish someone would start CDG, given that States of Guernsey would support the route (viability issues?)

flybe's big fustration is not being able to sell direct GCI-JER on the linear routes from the UK - next time I do intra-island on a Tislander Im taking ear plugs!

To keep to the point... GR wont touch new services with a barge pole at the moment, slash everything to cut costs - things are more transparent when your publically owned in the 21st century

Just one point to make... GR market themselves as 'the Channel Island airline' - given all the routes are ex-GCI, bar ACI-SOU isnt that a bit misleading?

I dont want to see GR go but something will give in the CI and it looks like they are the weakest link at the moment, lets hope the restructuring changes the situation