Aurigny made £6.5m in losses in 2024

The States-owned airline Aurigny made a loss of £6.5m in 2024, compared with a £1.7m profit the previous year.

The company said the loss was driven by extraordinary "wet lease" costs - involving renting a plane and crew to cover flights - and global supply chain issues.

In April, taxpayers were told it was unlikely they would have to foot the bill for the losses and that Aurigny would be "expected to trade their way out".

The firm, recapitalised by the island's government in 2015 and 2021, said it had been "a challenging year that both Aurigny and its passengers will wish to put behind them".

However, the company maintains that it avoided £10m in maintenance costs by selling a 122-seat Embraer jet.

The news follows the latest update on the finances of the States of Guernsey, which sees the public purse operating at a £44m "core" deficit.

The accounts said Aurigny had been "impacted by supplier issues on capacity provision following the removal of the jet from service".

The airline had announced the move in November 2023 to provide a "more streamlined and efficient service".

The States accounts added that Aurigny's situation was then "worsened by technical issues with existing aircraft, resulting in high cost, short notice leasing to operate scheduled services".

However, Aurigny was described as "remaining optimistic of delivering sustainable financial results going forward, while reducing the cost of air travel in real terms".

The company said: "Despite the challenges, Aurigny achieved record passenger numbers, reaching a historic high of 570,000 - a 3% increase compared to the previous year.

"Additionally, when adjusted for inflation, air fares fell in real terms, aided by the growth it delivered.

"The increase in the overall number of journeys demonstrates that the airline played a more significant role as a social and economic enabler for the islands."

Looking forward, the airline added that with wet lease flying down by 80%, the "extraordinary costs" it incurred in 2024 are unlikely to recur in 2025.

Deputy Jonathan Le Tocq said: "When we bought Aurigny, it was a time when we realised the island would be in a poor state connectivity-wise if it didn't own the airline.

"And while it's not essential we should do that forever, very few airlines out there seem to be in great shape financially at the moment.

"Yes, having Aurigny has been a burden, it's very small and doesn't have the flexibility to deal with something going wrong without it costing.

"Ongoing fleet rationalisation will certainly help, and some of my new colleagues are keen to find out if there's a different way of owning and running it - getting partnerships perhaps."

He added: "But we are not currently in an environment where we've got a lot of options."

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