Blue Islands Ceases Trading, Leaving Jersey’s Air Connectivity in Jeopardy

The recent announcement that Blue Islands has ceased trading and entered liquidation has sent ripples through the aviation sector in Jersey. The airline, once a vital connector for the island, has left most of its employees unemployed. According to liquidators from Ernst & Young, only 12 staff members will remain to assist in the winding down process.

Financial details emerging from the collapse reveal that Blue Islands owes the Government of Jersey £9.1 million. This figure includes a significant portion of a pandemic-related loan of £8.5 million, from which £7 million remains unpaid, alongside accrued interest of £400,000. In addition to this, the government had offered recent financial support of £1.2 million in November and £500,000 in September.

Impact of Blue Islands on Jersey During the Pandemic

Reflecting on the airline’s role, Matt Thomas, chief executive of Ports of Jersey, stated, “They were an amazing partner.” He emphasized how crucial Blue Islands was during the pandemic, particularly when other airlines like Flybe, EasyJet, and British Airways halted their services. Blue Islands was the only airline flying to Jersey at a critical time, helping to repatriate residents and transport essential supplies.

Thomas noted that the financial support provided by the government was instrumental in keeping Blue Islands operational during a tumultuous period. “The loan… helped Blue Islands continue when they would have collapsed,” he stated. Over the past five years, the airline managed to operate approximately 25,000 to 30,000 flights.

Prior to their liquidation, Ports of Jersey was aware that Blue Islands was at a “crossroads.” Discussions about potential routes forward had been ongoing since June, as the airline explored different options with both the government and Ports of Jersey. Despite contingency planning initiated in October, the decision to close was only finalized last week.

Future of Air Connectivity in Jersey

In the wake of Blue Islands’ closure, Loganair and Aurigny have stepped in to maintain air connectivity. Thomas explained that Loganair had previously been in discussions with Blue Islands about possible partnerships or acquisitions. “There were similarities between the two airlines in terms of the markets they serve,” he noted, adding that Loganair operates a much larger fleet.

Despite the challenges posed by Blue Islands’ collapse, Thomas expressed optimism about the future of air routes from Jersey. He pointed out that while Blue Islands struggled with scale, the routes they operated were profitable. “They were running a schedule with four aircraft and one aircraft spare,” he explained. “The biggest difference between Blue Islands and Loganair is Loganair has the scale to withstand operational issues.”

Furthermore, Thomas highlighted that the aspirations for enhancing Jersey’s connectivity remain strong, as evidenced by easyJet’s recent announcement of a new route from London Southend to Jersey for the upcoming summer season. However, he acknowledged the competitive landscape, stating that drawing airlines to the island involves more than just persuading them to operate flights; it also requires filling those flights consistently.

“We are operating in a really, really competitive world,” Thomas cautioned. “Ensuring that we’re value for money and that the whole industry is coming together to put Jersey’s best foot forward is really important now.” He remarked on the government’s commitment to supporting the aviation sector, including the establishment of a route development fund.

As Jersey navigates this challenging transition, the focus will be on how to sustain air connectivity while attracting new airlines to the region. The recent collapse of Blue Islands serves as a reminder of the fragility of the airline industry and the critical need for strategic planning and support.