Aurigny Air Services has received approval from the States of Guernsey to acquire additional aircraft in order to fill a void from March 2014 onwards left by Flybe when the carrier discontinues its London Gatwick route.
According to a government of Guernsey report, the treasury and resources department will facilitate any borrowing by the Aurigny Group to finance the purchase of additional aircraft by providing guarantees for borrowing from third parties, or by offering the group a loan. The treasury has also been authorised to facilitate the leasing of any aircraft, including if required, acting as guarantor to the lease.
Aurigny, which operates an ATR 72 fleet, is looking at expanding operations through the acquisition of a 120-seat jet aircraft or 64-seat turboprops, or a combination of both.
The carrier says a used turboprop could cost between $14 million and $16 million, while the list price of a new turboprop is between $25 million and $26 million. New jets range between $40 million and $48 million, says Aurigny, while a used jet aircraft is priced between $25 million and $26 million.
Lease options include $140,000 a month for the used turboprop, plus a $350 hourly charge, says Aurigny. A used jet aircraft's lease rate is estimated at $220,000 a month plus a $600 hourly charge. New turboprop lease rates are $200,000 a month compared with new jet lease rates of $300,000.
"The turboprop option is contingent on the airline securing additional slots at Gatwick airport," says the report.
"Initial discussions continue to indicate that these may be available for allocation from the existing slot pool without having to purchase them from other airline operators.
However, it is unlikely that confirmation about the availability of slots will be received until November. Given the lead-in time for acquiring additional aircraft, this delay may preclude further consideration of this option," says the report.
Flybe announced that it was withdrawing all of its existing services from Gatwick airport in May and that it had reached a conditional agreement to sell its slot portfolio to Easyjet. The Exeter-based carrier cited the pricing regime applied by the owners of Gatwick airport on the operators of smaller regional aircraft, together with what it regarded as the punitive levels of Air Passenger Duty imposed on domestic services, as the main reasons for its decision, noting that none of its services at Gatwick had returned a profit over the last year.
The slots sold to Easyjet are not tied to the routes they had previously been used to operate. "At this time, Easyjet has not confirmed the routes on which it intends to deploy its newly acquired slots," says the report.