Guernsey airline Aurigny cost taxpayers nearly £10m in 2019

The airline blamed "erratic market conditions" caused by deregulating the market for the growing losses

Guernsey's airline cost taxpayers nearly £10m last year, almost £2m more than expected, States accounts reveal.

Aurigny suffered £9.7m losses - more than those incurred in 2018 and 2017, which were £4.4m and £5.2m.

In October, it forecast a 2020 loss of more than £9m, which did not anticipate the impact of the coronavirus pandemic.

It blamed the latest figures on "erratic market conditions" created by deregulating the market and States subsidies for competitors.

In the 2019 budget, Aurigny had been expected to lose £4.4m, but in September a 73% rise to £7.6m was predicted, and the accounts show its actual losses in 2019 were £9.7m.

'Role of competition'

Aurigny acknowledged £2.8m had been lost on the Alderney route, but this was the same as 2018.

A spokeswoman said: "The bulk of the losses incurred in the year are attributable to the erratic market conditions seen throughout 2019 created by the 'open skies' policy, as well as subsidised competition and unsustainable ticket prices."

The airline emphasised their role as an "essential investment", providing "lifeline services" during the coronavirus pandemic.

It added the company was ready to become an "economic enabler" once travel resumes and hopes to start an "air travel corridor" between the island and the Isle of Man.

Deputy Gavin St Pier, the President of the Committee for Policy and Resources, acknowledged the open skies policy had "changed" the marketplace in 2019.

He said: "There are some very real challenges about the size of our market and therefore the role of competition."

Aurigny's function as a "strategic asset" is a question the States must resolve soon, given the "substantial cost" to taxpayers, Mr St Pier argued.

A short term goal of the States' proposed "revive and thrive" economic recovery strategy is completing a review into travel links, which includes examining Aurigny's role as an economic enabler, he added.