“THE last few days have been tinged with sadness,” said Ports of Jersey chief executive Matt Thomas, reflecting on Blue Islands ceasing trading and going into liquidation.
Most of the airline’s employees have been made redundant, with liquidators Ernst & Young stating on Wednesday that 12 staff had been retained to support the winding down process.
And since the collapse was announced just over a week ago, the scale of Blue Islands’ debt has started to emerge.
On Monday, Treasury Minister Elaine Millar confirmed that the airline still owed the Government of Jersey £9.1 million.
In addition to more recent financial support of £1.2m and £500,000 provided in September and November respectively, this also includes £7m of an £8.5m loan given to Blue Islands during the pandemic – and £400,000 of interest on that loan.
But Mr Thomas highlighted “how critical the role was that they played through the pandemic”.
“When Flybe collapsed and EasyJet and BA grounded their fleet, Blue Islands were the only people that were flying to Jersey for a period of time where we were trying to repatriate Islanders, or trying to bring PPE [personal protective equipment] in for Islanders, or we had critical workers based in the UK.
“They were an amazing partner.
“The loan that they [the government] provided, that helped Blue Islands continue when they would have collapsed at the same time as Flybe – I think it’s really easy to forget that was money that was incredibly well spent.
“They then went on to provide 25,000 or 30,000 flights in the five years that followed.
“The hope was very much that it would then either be able to stand on its own two feet in the future, or it would maybe become part of something bigger that would provide that resilience in the future.”
Mr Thomas said that, prior to the recent announcement, Ports had been aware Blue Islands was “at a crossroads with its future”.
“They came to see us in June.
“They could see different routes forward that they asked us and government to evaluate together. There was then a period of looking at different options with them.”
He also said that Ports had been considering options “from a contingency planning point of view” since October.
“But the decision was only taken on Friday of last week, so it wasn’t that we’ve been finger over the button on pressing go on a contingency plan for ten days. That was Friday afternoon that we became aware.”
In the immediate aftermath, it was announced that Loganair has stepped in alongside Aurigny to support air connectivity.
“Loganair were part of the process that Blue Islands were looking at,” Mr Thomas explained.
“They were having conversations with them about everything from a potential acquisition to some sort of partnership going forward.”
He noted that there were similarities between the two airlines in terms of the markets they serve.
“Albeit Loganair are the biggest player in that segment by a long way – I think Loganair have around 40 planes, whereas Blue Islands had five.”
Mr Thomas also pointed to the Scottish carrier’s announcement months ago about operating flights between Jersey and Southampton from 2026.
“I think they’ve been interested in the Jersey market and the Channel Islands market for a while.
“The meaningful conversations about contingency planning, for instance, were that same timeline. It’s really been since October time, and realistically sharpening that up a lot in November.”
It has also been revealed that Blue Islands owed Ports £3.275m, accrued from landing charges and other fees and services.
“Working hand in glove with government, they asked us to provide working capital support to Blue Islands, in terms of not enforcing collection of all of our outstanding debts, because it’s important that we keep the connectivity going,” Mr Thomas said, acknowledging that Ports was “in a pot with the other creditors”.
But he also said that he did not envisage the debt having an impact on day to day operations.
“Our turnover is nearly £70 million a year.
“We’re not a private sector business, so we’re here serving the Island and ensuring the continuity of the connectivity and working with government to do that.
“I would rather not have a bad debt, and we have all the money to invest back into what we do, but I’m comfortable with the reasons why we supported Blue Islands – because it was the right thing to do for the Island.”
In May, Blue Islands started operating a twice-weekly direct flights from Jersey to Paris, just a few months after Economic Development Minister Kirsten Morel revealed that the government would “mobilise up to £2m over the next two years” to assist the development of new air routes through its Better Business Support Package.
Asked what the airline’s collapse meant for the future of the Island’s air connectivity, Mr Thomas said: “One of the questions we’ve had in the last few days [is] if Blue Islands couldn’t make money on these routes, then why would Loganair be able to?
“And I think the really important thing to understand is, actually the routes are profitable. The only thing that Blue Islands lacked was scale.
“They were running a schedule with four aircraft and one aircraft spare.
“So when the aircraft are available, actually, the business was profitable. But if they had two aircraft that went tech at the same time, you’re not able to fulfill the schedule, and you lose money very, very quickly.
“So the biggest difference between Blue Islands and Loganair, for instance, is Loganair has got the scale. It’s got the scale to withstand if more than one plane goes tech at the same time.”
He contended that “the aspirations for growing Jersey’s connectivity are absolutely there”, citing easyJet’s announcement on Thursday that it is launching a new route from London Southend to Jersey for next summer.
But Mr Thomas also acknowledged that “we are operating in a really, really competitive world”.
“A lot of people that [we] are trying to coax to come over, they’re going to be comparing Jersey to, not just Cornwall and the Lake District and Brittany, but to Majorca and Italy.
“So ensuring that we’re value for money, that the whole industry is coming together to put Jersey’s best foot forward, is really important now.
“And you can see it. You can see it coming together. You can see government, through the Better Business Support Package, has diverted more money to Visit Jersey and – for the first time – has introduced a route development fund with us, so that we’re able to offer more attractive propositions to airlines to start here.
“As we go forward, the challenge isn’t going to be persuading an airline to fly here. It’s after we’ve persuaded the airline to fly here, filling the planes to carry on flying here – and that’s a really serious challenge.”
