The airline is intent on suing the government for going back on an agreement to grant Flybe sole operator status on the Guernsey to Gatwick air route.The airline claims it had entered a legally binding agreement with the Guernsey Transport Board that if British Airways withdrew from the route, Flybe would be granted a licence to be only operator on the route.However, when BA withdrew, the States of Guernsey agreed to take over ownership of the valuable take-off and landing slots.
As a result the Guernsey government bought Aurigny Air Services for up to £7m to operate services.It is understood Flybe has notified the Guernsey Transport Board that it intends to pursue its claim for damages for breach of agreement.
And the longer the issue remains unresolved, the bigger the damages claim will be.The airline’s managing director Jim French has written to all Guernsey States members to say that if Flybe presses ahead with its legal case, part of the reasoning will be to ensure that Guernsey States committees do not in future ‘seek to rip up binding legal agreements’.’We also want to protect the right of airlines to operate in free competition in the provision of air services to Guernsey,’ says Mr French in his letter.He said the airline was fundamentally concerned that as the States of Guernsey purchased Aurigny for the right to the slots, the government cannot allow Aurigny to fail, regardless of its commercial actions in the aviation marketplace.
‘As a result, we believe that Flybe will face state subsidised competition, which will jeopardise our future profitability and therefore potentially jeopardise Flybe services, which currently move 450,000 passengers to Guernsey each year,’ says Mr French.The airline’s managing director said that Flybe believes there is a danger that the people of Guernsey might end up needlessly subsidising a loss making government-owned airline.
‘The people of Belgium, Ireland and Switzerland have found that state-run airlines are a bottomless money pit,’ says Mr French.He reveals in his letter that the airline is awaiting a response to proposals put to Guernsey’s Advisory and Finance Committee that it claims will protect the Gatwick take-off and landing slots, while reducing the risk of the Guernsey taxpayer having to bail out a loss-making Aurigny.’We are awaiting a final response from the committee to proposals that would have funded the Gatwick slot purchase.
The proposals, if accepted, would also protect taxpayers from losses through the further expansion of a state owned airline and, at the same time, safeguard Flybe’s future services to the Island by removing the threat of predatory States-subsidised pricing by Aurigny,’ said Mr French.