In brief: One year after Blue Islands ceased operations, Jersey’s government is still owed more than £7.3 million in outstanding loans, with liquidators Ernst & Young reporting no further funds received since the collapse. Replacement carriers Loganair and Aurigny have stepped in, and both Jersey and Guernsey are reporting record or improved air connectivity, though global fuel price pressures continue to shadow regional aviation.
The £7.3 Million Question
It has been a full year since Blue Islands folded on 14 November 2025, and the financial hangover shows no sign of clearing quickly. Jersey’s Treasury and Exchequer has confirmed to the BBC that the outstanding balance on government loans to the airline stands at £7,382,822, with “no further funds received” from liquidators since the closure. That is a considerable sum of public money sitting in a very uncertain queue.
The liquidators, Ernst & Young, offer a cautiously optimistic picture. Most of the airline’s remaining assets have now been sold or converted into cash, and EY has stated that “all preferred creditors will therefore be paid in full,” with further payments expected. The key word, of course, is “preferred.” Where Jersey’s government loan sits in that pecking order will determine how much of that £7.3 million islanders ever see again.
Guernsey faces a similar, if somewhat less acute, situation. Guernsey Airport’s Director, Richard Thomasson, told the BBC that the majority of Blue Islands’ debt owed to Guernsey Ports was recovered following a settlement reached with the aircraft lessors after the collapse. However, a remaining amount, understood to be a combination of unpaid rent and landing fees, is still outstanding, and Guernsey Ports confirmed the “process remains ongoing.”
New Carriers, New Records
Whatever the financial wreckage left behind, the practical impact on passengers has been absorbed with surprising speed. Loganair stepped in to operate replacement services in Jersey, and its CEO, Luke Farajallah, told the BBC the airline had carried nearly 150,000 passengers in its first year, noting candidly: “We had to start operating before we could start selling tickets.” That is not a sentence most business school graduates would recommend, but it speaks to the urgency of the situation.
Aurigny took on additional routes on the Guernsey side, with its chief executive, Nico Bezuidenhout, describing the collapse as “highly undesirable and unexpected” and acknowledging the airline had to restore connectivity “literally overnight.” Both carriers offered special rescue fares to assist stranded passengers in the immediate aftermath.
Ports of Jersey chief executive Matt Thomas told the BBC that Jersey is now “flying to more destinations than it’s ever flown before” since the liquidation. “We miss the Blue Island guys,” Thomas said, “but we’ve got a set of carriers now that are the leading carrier in their segment.” In Guernsey, Deputy Sasha Kazantseva-Miller, President of the Committee for Economic Development, reported a record number of air passenger movements, crediting in part the committee’s work facilitating British Airways operating a daily rotation service, which she said had increased visitor numbers to Guernsey by 30% over the past six months. “About 81% of that growth is actually driven by British Airways,” she added.
Storm Clouds on the Horizon
The recovery story comes with a significant caveat. Aviation expert John Strickland warned the BBC that global pressures are bearing down on regional airlines. “With fuel prices as high as they are since we saw this conflict between US, Israel and Iran start in the Spring, there’s been a little bit of softening lately,” he said, adding that “smaller communities and smaller volume markets tend to be quite often price sensitive” when it comes to people’s willingness to pay elevated fares.
For Jersey and Guernsey, this is not an abstract concern. The islands depend on reliable, affordable air links for everything from business travel to medical appointments on the mainland. The Blue Islands collapse was a sharp reminder of just how exposed small island communities are when a regional carrier fails. The current carriers may be performing well, but the structural vulnerabilities of island aviation have not disappeared.
Source: BBC News
