Blue Islands pays back almost fifth of £8.5m Gov covid loan

Wednesday 30 October 2024

Blue Islands has paid back 17% of a £8.5m loan from taxpayers that it received in July 2020, halfway through the repayment period.

A response to a recent request under the Freedom of Information Law reveals that the airline did not end up using all of the £10m of Government-backed credit issued almost two-and-a-half years ago in the depths of the pandemic.

The FoI response from the Government adds that, of the £8.5m loaned, £1,425,653 of the capital sum had been repaid by the end of last month.

With the airline - along with many others - facing an existential crisis during the pandemic, with most flights grounded except lifeline services, the Government agreed to invest in the airline, with Blue Islands moving its operational base to Jersey as part of the deal.

Originally, the loan had to be repaid by the end of 2026 but after the second wave of covid hit over the winter of 2020/21, the final repayment date was extended to 31 December 2028.

Pictured: Rob Veron, Blue Islands CEO.

It is understood that capital repayments and interest are made quarterly in accordance with the terms of the loan. Based on 17 quarters between July 2020 and now, the capital on the loan is being repaid at around £84,000 every three months.

There are also 17 quarters between now and the end of 2028, meaning that repayments will have to increase if the loan is to be repaid on time at the current rate.

Meanwhile, Blue Islands, which is owned by the family of the late Guernsey-based businessman Derek Coates, appeared to pour cold water on a recent suggestion from Guernsey’s Chamber of Commerce that it merges with States of Guernsey-owned airline Aurigny, which is currently the focus of a financial review.

Pictured: Guernsey's Chamber of Commerce's suggestions for improving air travel connectivity were published last month and have sparked debate in the business community since.

Blue Islands has pointed out that it already works closely with Aurigny, including having a codeshare agreement on the Guernsey-Southampton route, and appointing the Guernsey airline as its ground handling agent in the island.