BLUE Islands’ decision to cease trading and enter liquidation – after 26 years of serving the Channel Islands – came as shock to many.
While much of the dust has started to settle in the days that have passed since the announcement, including the emergence of details around the airline’s debts, there remain a number of unanswered questions.
What do we know so far?
Blue Islands halted operations on Friday 14 November, stating that – despite “very constructive” dialogue – it had been informed that the Government of Jersey was “unable to provide further support”.
It has since emerged that the Council of Ministers held an emergency meeting on that Friday afternoon where the decision to not provide any further funding for Blue Islands was taken. This decision was communicated to the business at around 4.30pm.
As a result, the airline took the decision to immediately suspend operations and the last Blue Islands flight touched down in Jersey at 7.40pm, while it is leaked to the media that the airline is “on the brink”.
The firm’s chief executive Rob Veron wrote to staff at 9.34pm, telling them in an email that the immediate suspension of services “was not an outcome that we had expected, nor could we possibly have seen that this afternoon’s events would result in matters deteriorating as quickly as they have”.
A media statement confirming the suspension of services was sent out less than 20 minutes.
Loganair’s chief executive, Luke Farajallah, said he received a phone call around 10pm asking the airline to initiate a contingency plan. That evening, Loganair begins loading routes into its website.
Before the weekend was over, it was announced that Loganair was stepping in alongside Aurigny to support air connectivity, with Ports of Jersey explaining that the Scottish carrier was planning to establish a “permanent operating base on the Island”.
By Monday, Treasury Minister Elaine Millar stated it had been confirmed that Blue Islands had decided to go into liquidation.
She also said that the airline owed the goverment £9.1 million, including £7m of an £8.5m loan given during the pandemic and £400,000 of interest on that loan, as well as more recent financial support of £1.2m and £500,000 provided in September and November respectively.
A day later, Ports of Jersey confirmed it was owed £3.275m from Blue Islands “accrued from landing charges and other fees and services”.
On Wednesday, liquidators Ernst & Young announced that the majority of the airline’s employees had been made redundant, with 12 staff retained to support the winding down process.
And on Friday it emerged that at least 50 of those employees, mostly crew, have been taken on by Loganair so far.
What about Blue Islands’ planes?
The airline had a fleet of five ATR turboprop aircraft, two of which are being held at Guernsey Airport.
Speaking to the JEP on Thursday, Ports of Jersey chief executive Matt Thomas said the other three planes were still on the ‘pier’ at Jersey Airport.
He noted that the aircraft were leased by Blue Islands, and that the lessors “will be liaising with the liquidators to get their planes back”.
“Sadly, this isn’t the first airline that’s collapsed over a number of years,” he said.
“There are processes that liquidators and lessors follow at times like this”.
He added that he expected the process would conclude “sooner rather than later”.
“Fortunately for us, from an airport point of view, in peak summer we need every stand on the pier [but] right now it’s much quieter. So actually, there’s no real operational impacts at the moment.
“Obviously we’re working constructively because, at the point at which it gets busy, we’d need to move them to remote stands so that it doesn’t interfere with the operation of the Airport.”
How much of the debts will be recovered?
Mr Thomas also said there was a chance “to get some of the money back”, acknowledging that Ports is “in a pot with the other creditors”.
But he stated that the debt was not having an impact on day to day operations.
And Economic Development Minister Kirsten Morel has reportedly said that the government believes it could be able to recover up to £3 million, but that this won’t be clear until the liquidation process has been completed.
What about refunds for affected Blue Islands’ customers?
Jersey Consumer Council chair Carl Walker yesterday told the JEP that the JCC’s dedicated web page regarding Blue Islands’ collapse and consumers’ rights had been visited more than 8,500 times in a week.
But he explained that there were still issues with debit card refunds, citing “inconsistent reasons from banks and card providers”.
Unanswered questions
The JEP has asked Treasury Minister Elaine Millar for a response on several points, including when she was first made aware that Blue Islands was on the verge of collapse.
Other questions put forward by this newspaper relate to the consideration of the financial support given in September and November what checks and balances were put in place regarding the funds handed to the firm and whether there were assurances in place to recover the funds.
It also remains unclear how much the government may be owed in terms of tax and social security payments which have been outstanding at the time of Blue Islands ceasing operations.
However, the JEP was told that there would be no response to the questions until Deputy Millar makes a statement during today’s States sitting.
