Operating from the Channel Islands presents some challenges, but, with incoming technologies and a focus on supporting economic enablement in its home market, Aurigny must continue to provide essential air services.

Aurigny Air Services, one of the smallest scheduled airlines in the UK’s crown dependency, must contend with one of aviation’s oldest problems as a major hindrance to its operations.

The carrier faces up to 60 days of disruption a year because of the sea mist that frequently rolls in over its home base of Guernsey and the nearby island of Alderney, which it links with vital air service. Now, it hopes that technology will help ease that problem.

Aurigny is to be the lead airline customer for the ClearVision enhanced vision system that is designed to allow aircraft to operate in poor visibility.

ClearVision is an optional fit on the ATR 42-600 and 72-600 turboprop and Aurigny plans to buy three of the later models. The system contains four options. The first is Skylens, a head-mounted display visor, worn by the pilot, which provides flight guidance symbology and runway highlighting information.

This can then be combined with a Synthetic Vision System (SVS), which generates images of terrain and obstacles from a database, or an Enhanced Vision System (EVS), which displays an augmented outside view to the visor, provided by cameras and sensors in the aircraft’s nose cone.

The final option is the Combined Vision System, which connects both EVS and SVS via the Skylens headset.

ATR said that a study had shown that, over a year, ClearVision could have saved 24 of the 48 landings that Aurigny had been forced to abandon because of fog. This would have a significant impact on the costs the airline faced resulting from the disruption of its operations, from delays, diversions or cancellations.

Aurigny operates three aircraft types – unusual for such a small company and a situation that commercial director Malcolm Coupar accepts is not the most efficient solution when it comes to maintenance costs.

However, the nature of the carrier’s route network demands the use of the Dornier 228 for the ultra-short Guernsey-Alderney sector, ATR turboprops for Dinard (France), Southampton and other UK regional airports, plus a single Embraer E195 for what the island’s government deems to be the critical ‘lifeline link’ to London-Gatwick.

For decades, Aurigny was famous as an operator of the Britten-Norman Trislander, the three-engined ‘big brother’ to the Islander. The company used the Trislander specifically for the 22nm/40km Guernsey-Alderney hop and finally retired its last example in 2017 after the type had clocked up a remarkable 42 years of service.

Finding a replacement for such a niche aircraft was never going to be easy, and the shortlist came down to the Viking Aircraft Twin Otter, the Dornier 228 and the Let-410.

All were, to some extent, a compromise, says Coupar, but the best of the available types for the Alderney route was the Dornier, now built by Swiss company RUAG. The type’s short take-off and landing (STOL) performance (Alderney’s runway is only 875m long) plus good crosswind tolerance made it the preferred choice.

By early August, Aurigny had two ‘classic’ Do228s and a single Do228 New Generation (NG) in service, plus a third ‘classic’ on loan from the manufacturer while the airline waited for its second NG to be delivered. That was in RUAG’s paint shop and should have been delivered by the time these words are read.

Delivery of the new Dorniers – particularly the latest one – has taken longer than Aurigny would like, admits Coupar. “When we made the decision, there was quite a long waiting list and they were manufacturing them in batches, so you had to wait for a certain number to be ordered before they started up the production line.”

With the arrival of the second 228NG, the loaned ‘classic’ will be returned to RUAG and another will be disposed of, leaving a single older model to act as a back-up aircraft to the two 228NGs.

The next step up the ladder in terms of size are the ATRs – three ATR 72-500s plus a single 42-500 – that are scheduled to be replaced by three ATR 72-600s, for which the company signed a letter of intent in July.

Assuming the purchase is confirmed (sign-off by the Guernsey government is required), Aurigny will receive the first in late summer 2019, with the remaining two arriving at roughly monthly intervals. This is where the new ClearVision system comes in. Aurigny has ordered it as a factory-fitted system on the new aircraft.

“It’s not proven in commercial service,” says Coupar, “although it exists in business jets and military aircraft, obviously. It’s proven technology but the upsides haven’t been demonstrated in a commercial, scheduled environment.

“ATR came up and conducted tests. They and we believe it’s a significant step forward; around 50 per cent of the disruption we suffer will be nullified.” The company’s flagship is its sole jet, an Embraer E-195.

“The rationale for that and for having a one-fleet Embraer is that we’ve got six pairs of slots at Gatwick and used to compete with Flybe [on the Guernsey route]. It’s the most important route for the economy of the island and, when Flybe announced that they were leaving, the [Guernsey] government required us to replace as much of the lost capacity as we could.

“Up to then, we were just running ATRs. We did an evaluation of what aircraft could operate between Gatwick and Guernsey; the limiting factor is the runway length at Guernsey and the E-195 fitted the bill best. We operate four times a day to Gatwick with the E-195 plus two ATR rotations.”

As well as Gatwick, Aurigny also operates a daily service to London-Stansted. This is a much more leisure-orientated sector. Historically, Aurigny operated into the Essex airport more frequently than today, but the Gatwick service superseded it.

However, Coupar affirms: “We have a fairly strong Eastern European workforce on the island, and they find Stansted the most useful place to get transfers back to Eastern Europe.”

At the urging of business interests in Guernsey – which has a large financial services community – Aurigny launched a third London service, to London City Airport (LCY). It was not a success, as the company quickly found that it was simply cannibalising its other London traffic.

Losses were considerable, not helped by the fact that the airline leased an ATR 42 specifically for the route. LCY was dropped towards the end of the company’s last financial year and this was a major factor behind its £5 million loss on a turnover of £45 million. “This year is looking a lot better and the primary reason for this is stopping London City,” says Coupar.

Generally, Aurigny prefers to buy its aircraft outright, rather than leasing them. It leased it’s ATR 42-500 specifically for LCY, and, with that now gone, it is trying to sub-lease the aircraft to reduce the costs of still having it on contract. “If we’d owned it, we could probably have sold it by now,” says Coupar, a trifle ruefully.

Remarkably, Aurigny does not have a competitor on any of its routes. A situation most airlines would give their eye and teeth for, one might think, but the situation is less rosy than it appears. The airline is hampered by stagnant passenger traffic from Guernsey’s small population, together with a dwindling tourism market.

“There’s no obvious place to get more passengers,” says Coupar. “The tourism product is static; there’s very little investment being made on the island and people’s expectations of holidays are changing all the time. The cost of flying to the sunshine is reducing.”

The island is becoming less competitive as a tourism destination, he laments, and the island is locked into a negative spiral. “The volume isn’t there, so people can’t make the case for investment.” In turn, that makes the island less attractive for tourists, especially as it is not a cheap destination compared to many Mediterranean resorts.

By contrast, in neighbouring Jersey, the domestic market is that bit bigger, investment in infrastructure such as hotels is going ahead and the island is reaping the benefit in tourism growth as a result. With that in mind, the best option for Aurigny is trying to maintain what market it has.

The problem of static passenger numbers has been with the island for at least a decade, which was one of the reasons that the States of Guernsey – the island’s government – stepped in to buy Aurigny in 2003. The finance sector provides the largest part of the island’s GDP and that community needs a guarantee of stable flights to the UK.

“History shows that commercially managed airlines don’t find Guernsey particularly attractive, and, when under pressure to develop their own network or cutting back, Guernsey has fallen victim to that on several occasions.” British Airways, Air UK and Flybe are all names that have come and gone from Guernsey’s airport over the years.

There have been complaints from islanders over the years of the ticket prices charged by Aurigny. The local marketplace is ‘tremendously challenging’, admits Coupar. “People’s perception has changed [together with] continuous change driven by the activities of the low-cost carriers.”

People now expect to be able to fly for very low prices, “and we’re always being compared with the headline prices you see with big carriers. From a marketing perspective, it’s a difficult environment for us to say why, relative to the LCCs, our prices are higher. It’s difficult for us to operate as we do; we’re sub-scale. We have a much higher proportion of our ticket prices covering our overheads.”

One possible way out of this situation is via codeshares or alliances to bring Guernsey to the attention of a wider pool of potential visitors.

“We’re in discussions with a number of carriers about that type of activity, and we think if we can get the right partnership with big enough carriers that put Guernsey on their networks, that might make a little bit of difference in raising the profile of Guernsey around the planet.”

“As a state-owned carrier, our shareholder would rather see us break-even at low fares rather than make a profit at higher fares. We’re seen as an economic enabler, so our objective is to get as close as possible to break-even. The secondary objective is to keep fares as low as we can to carry more people.”

One problem passing across Coupar’s desk at present is the renewal of the contract for the vital Guernsey-Alderney link, which is up for tender this year. It is not yet known what form this will take: “It could be a Public Service Obligation (PSO) route that is risk-free from the winning airline’s perspective or it could be risk-sharing.”

It is also not known whether there are likely to be any competitors for the service. Locally based Waves (a new air taxi service) could be interested, as might a start-up, Air Alderney, which would use a Britten-Norman Islander.

As another option, Scottish regional Loganair, with its long history of servicing the Orkney and Shetland island groups, might be interested in taking a run at the contract, muses Coupar. Operating regional services in the UK has never been easy.

Operating them in the constrained market of Guernsey is even more difficult. The fact that Aurigny is this year celebrating its 50th anniversary suggests that it must be doing something right.

Editor’s Note: The post was originally published in October 2018.