Monday 25 March 2019
In May 2014, the Treasury & Resources Department, under then Minister Deputy Gavin St Pier, advised the Assembly that:
"2.1 Without doubt, air transport links to Guernsey and Southampton are essential to Alderney. They are fundamental to the long-term economic sustainability of the Island and tourism, in particular, is heavily dependent on such air links. They maintain important links for the Island's population, supporting business and helping to attract inward investment, maintaining friend and family contacts, as well as access to social services such as medical facilities and treatments and access to training and education outside the Island."
In proposing the acquisition of Dornier 228 aircraft to replace Aurigny's ageing fleet of Trislanders, the Assembly was told;
"5.1 Aurigny anticipates a requirement for three Dornier 228 aircraft. Whilst two aircraft can operate the majority of the schedules from Alderney to Guernsey and Southampton, a third is partially required to fully service its anticipated flight schedule at certain times of the year. The third will also be used to provide additional ad-hoc capacity to Alderney at peak periods, such as Alderney week, as well as establishing new services, such as that to London City Airport. This aircraft will also maintain operational integrity for the core schedules during periods of aircraft maintenance."
Aurigny has recently been operating the Alderney routes using four Dorniers, being two new NG models and two older models used to meet the requirements of the schedule agreed with the States of Alderney under a service level agreement and to provide back-up when either of the new aircraft are out of service.
Aurigny's accounts show that these routes operate at a loss of £3m per annum.
It was therefore a surprise to the team evaluating the bids under the proposed PSO on the Alderney routes when Aurigny submitted a bid based on a much-reduced schedule operated by only two aircraft. Under this proposal, the capacity on the Alderney - Southampton route would be virtually halved, and there would be no resilience in the proposed fleet to cover periods when one or both of the aircraft were out of service. The proposed service level fell far short of the specification in the Invitation to Tender (for the PSO contract), and far short of what Alderney requires.
Even more surprising, to the PSO team, was that Aurigny wanted a subsidy greater than the losses currently being incurred in their 4-aircraft operation.
The PSO process would not allow the States of Guernsey to negotiate a reduced service level with one of the bidders. All of the bidders have to be allowed to bid for the same specification of services. None of the other bids received were wholly compliant with the terms specified in the Invitation to Tender.
The Committee notes that a follow-up meeting was held with all of the bidders with an AOC (one of the qualifying criteria for the tender), so there was a clear opportunity for Aurigny's representatives to make any comments in relation to their submission that they wished to make at that time.
The Committee for Economic Development shares the frustration of the people of Alderney that this process did not have a satisfactory outcome, but stands by the people of Alderney in insisting that the winner of the PSO process should provide Alderney with the connectivity that the island needs.