Blue Islands Airlines Ceases Operations, Leaving Jersey in Limbo

The collapse of Blue Islands, an airline crucial for Jersey’s connectivity, has resulted in significant job losses and financial fallout. The company has gone into liquidation, with liquidators from Ernst & Young confirming that only 12 of its employees have been retained to assist with the winding down process. Matt Thomas, chief executive of Ports of Jersey, expressed his sorrow over the airline’s closure, marking a challenging period for the region.

As the situation unfolded, Jersey’s Treasury Minister Elaine Millar disclosed that Blue Islands owed the government approximately £9.1 million. This debt includes £7 million from an £8.5 million loan provided during the pandemic, alongside recent financial support of £1.2 million and £500,000 issued in the latter part of 2023. Thomas emphasized the critical role Blue Islands played during the pandemic, stating, “They were the only people that were flying to Jersey when other airlines grounded their fleets.”

Impact on Future Connectivity

Blue Islands was instrumental in repatriating residents and bringing essential supplies to Jersey during a time of crisis. “The loan helped Blue Islands continue when they would have collapsed at the same time as Flybe,” Thomas noted, highlighting the airline’s contribution of 25,000 to 30,000 flights over the past five years. The hope was that Blue Islands could eventually thrive independently or merge with a larger entity to bolster connectivity.

Prior to the announcement of its liquidation, Ports of Jersey had been aware that Blue Islands was facing a pivotal moment. “They came to see us in June, indicating they were exploring various routes forward,” Thomas explained. The planning for different options had been underway since October, but the final decision came only days before the announcement.

In response to Blue Islands’ exit, Loganair has stepped in alongside Aurigny to ensure continued air services. Thomas indicated that discussions between Blue Islands and Loganair had already been taking place regarding potential partnerships, underscoring the market similarities between the two carriers. Loganair operates a significantly larger fleet, with around 40 aircraft compared to Blue Islands’ five.

Financial Outlook and Future Challenges

Blue Islands also accrued debts of £3.275 million to Ports of Jersey from landing charges and other fees. Thomas acknowledged that while the airline’s failure was disappointing, Ports remains financially stable, with an annual turnover of nearly £70 million. “We’re here serving the Island and ensuring continuity of connectivity,” he stated, reinforcing the importance of supporting local air travel.

In recent months, Blue Islands had initiated direct flights from Jersey to Paris, following an announcement from Kirsten Morel, Jersey’s Economic Development Minister, about mobilizing up to £2 million to develop new air routes. Addressing concerns about the future of air connectivity, Thomas remarked, “If Blue Islands couldn’t make money on these routes, then why would Loganair be able to?” He clarified that the routes were profitable, but Blue Islands’ scale hampered its ability to operate effectively.

Thomas expressed optimism about the future, citing easyJet’s recent announcement of a new route from London Southend to Jersey for the upcoming summer. However, he acknowledged the competitive nature of the travel industry, noting that attracting visitors to Jersey requires a concerted effort to present the island as a desirable destination.

“The challenge isn’t just getting airlines to fly here; it’s about filling the planes once they arrive,” he warned. With initiatives like the Better Business Support Package and the introduction of a route development fund, there is a concerted effort to ensure that Jersey’s air connectivity remains robust in the face of these challenges.