"Disturbing" Lack of Action on Blue Islands' Financial Performance Following £10m Loan
The Comptroller and Auditor General's latest report, titled 'Critical Infrastructure Resilience - Transport Links', has raised concerns about the performance and financial status of airline company Blue Islands.
As of 31 May 2025, Blue Islands has repaid just 17% of the total £8.5 million loan received from the government, with no repayments made in the last two quarters. The repayment period for the loan is more than halfway through, but the airline's inability to make payments has prompted questions.
Treasury Minister Elaine Millar acknowledged the importance of Blue Islands in providing connectivity for islanders and reiterated the government's commitment to working with the airline to support reliable travel options. However, the report raised concerns about the lack of clear and consistent tracking and reporting of the performance measures linked to the Blue Islands loan. Lynn Pamment, a member of the Scrutiny Panel, described this "lack of monitoring" as "particularly concerning" due to recent concerns about Blue Islands' services.
The report also highlighted that Blue Islands did not use all of the £10 million of Government-backed credit issued during the pandemic. Furthermore, it is not clear if the government considers Blue Islands to be in breach of the loan agreement or if any actions are being considered in light of this.
The report set out a list of Key Performance Indicators (KPIs) linked to objectives of the Government loan to Blue Islands. One of the key concerns raised was the compromise of existing routes by the promotion of the new Paris route served by Blue Islands. The first review, according to the report, should be a detailed one of the impact of the new Paris route.
The report also addressed the small fleet of five aircraft owned by Blue Islands, which presents an inherent risk to resilience. In May 2025, Blue Islands announced that it would have to cancel 28 flights from the Summer 2025 schedule due to delays and damage to aircraft.
To address these concerns, the C&AG recommended the development of a formal process for post-implementation review of new air route trials involving Government, Ports of Jersey, and Visit Jersey. However, the identity of the person appointed to conduct this review is not specified in the provided information.
The loan repayment date for the £8.5 million loan has been extended from the end of 2026 to 31 December 2028. It is understood that the airline repaid £1,425,653 of the capital sum as of 30 September 2024.
The report's findings underscore the need for closer scrutiny of Blue Islands' operations and financial management, particularly as it continues to rely on government support. The airline has a significant role in connecting the islands, and ensuring its stability is crucial for maintaining reliable travel options for residents and visitors alike.
