Wednesday 01 February 2017
At their meeting in November, 2015, the previous States resolved that the States Trading Supervisory Board should give serious consideration to rebranding Aurigny Air Services with a name that clearly positions it as Guernsey's airline and to report back by February of this year with a policy letter setting out whether or not a rebranding should take place.
I should like briefly to update the Assembly today on my Board's current position with this project and explain why it will not be reporting back on the matter at this time.
Shortly after its election last September, my Board gave early consideration to the rebranding issue. In doing so, it was conscious that the strategic review of Aurigny being undertaken by the Policy and Resources Committee was underway and, in its broadest sense, would be considering the airline's role in the future, how it should be positioned and what kind of service the Island wants it to deliver.
It is worth noting the detailed terms of reference for the strategic review include consideration of:
- How Aurigny can best meet the needs of the community to support economic enablement;
- How Aurigny can help in driving visitor growth;
- How it can improve the quality and reach if its marketing; and,
- How a franchise arrangement - which could entail Aurigny adopting the livery and branding of a franchise partner - might support it in delivering its objectives.
Given the scope of the strategic review, my Board has taken the view that it would be premature to undertake the branding project at this time, particularly as this would involve committing financial resources to market research on the existing and potential alternative brands. The strategic review will be considering issues which should inform and guide decisions on the airline's branding - not vice versa - and, as such, there is a risk that undertaking work now on its branding could be pre-emptive.
Of course, we must acknowledge that, since the States asked my Board to consider a review of Aurigny's branding, there has been a substantial deterioration in the airline's forecast financial performance. Obviously, the scale of its future losses will be linked directly to any updated shareholder objectives that are set for the airline as a result of any recommendations arising from the strategic review that are accepted by the States. The Policy and Resources Committee indicated in the 2017 Budget Report that the future funding arrangements for the airline will need to be considered as part of this process.
Within this context, I should flag that Aurigny has informally advised that the cost of a rebranding could be in the region of £500,000 - recognising that there will be other related costs beyond just painting aircraft, such as stationary, signage, uniforms and so forth. Given Aurigny's current financial position, whatever costs that are involved in designing and implementing any rebranding will ultimately fall to the States. As such, as part of the branding review, my Board would wish to consult with the Policy and Resources Committee on the appetite and funding source for such expenditure within the wider context of the airline's agreed future funding arrangements.
Against the background of these issues, my Board has decided that work on the branding review should await the outcome of the strategic review of Aurigny. I should note that my Board did take the opportunity to advise the strategic review that it would be deferring a report to the States on the airline's branding in its written submission to the Review Panel.
