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Deputy questions Blue Islands loan

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CONCERNS over a proposed £10 million government loan to Blue Islands, designed to maintain air links, have been raised by a States Deputy.

Deputy Kirsten Morel Picture: ROB CURRIE. (28681482)

Earlier this month, the government said that discussions with the airline were at an ‘advanced stage’.

However, in private meetings held last week backbenchers questioned ministers about whether such a loan should be granted.

Deputy Kirsten Morel, who chairs the Economic Affairs Scrutiny Panel, said that while there was no doubt that the airline needed support from the government, a convertible loan – which would mean that the government could be repaid by acquiring shares in the business – was not the right approach.

He said: ‘What we are concerned about are some of the figures used to come up with the business plan.

‘They are not Blue Islands’ figures, but figures based on previous tourism statistics, so that is concerning in itself.

‘And the other thing for me is that it is a convertible loan. I don’t think it is good for the government to be taking shares in an airline if [the loan] can’t be repaid. I’m not against the loan but this is a concerning way to do it, given what has happened to the airline industry through Covid-19.

‘We see that Guernsey owns Aurigny and they have had issues with the company in the past.’

The government had also said the deal was being discussed as there was uncertainty over the capacity in which easyJet or British Airways would return to the Island following the coronavirus lockdown.

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Those companies have now said they plan to restart routes to and from the Island following the reopening of the borders on 3 July.

Deputy Morel has also criticised the lack of time Scrutiny panel members would have to scrutinise the Blue Islands deal.

He said: ‘We are hearing that the government is looking to have the deal signed this week, which gives us hardly any time to scrutinise all the parts of the agreement so it is going to have to be done quickly.’

Jonny Drury

By Jonny Drury
Journalist

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