Government in talks over £10m Blue Islands deal

Tuesday 16 June 2020

The Government is considering lending up to £10million to Blue Islands to guarantee Jersey’s air links, as two of the other major airlines are still yet to confirm their routes to the island, it has emerged.

A ‘convertible loan’ is under consideration, meaning that the Government can be paid back through shares in the business in return for their cash injection.

Arising in yesterday’s States sitting during a period of questions without notice to any Government Minister, Treasury Minister Deputy Susie Pinel revealed that a loan of up to £10m is being offered to the airline to protect “vital” air links.

This comes as two other major airline companies, British Airways and easyJet have still not confirmed that they will continue flying to and from Jersey going forwards.

Pictured: The negotiations with Blue Islands continue as other airlines haven't confirmed their Jersey routes. 

Blue Islands are currently operating the ‘lifeline’ flights between Jersey and the mainland through return flights to Southampton three times a week and Gatwick once a week. The contract for this service was budgeted at being £330,000 at a maximum, but the Government is estimating this cost will come in “significantly below” that figure as it’s offset by ticket sales. 

When asked by Deputy Steve Ahier whether the Minister is considering offering further support to the airline “to ensure air connectivity to Jersey in these turbulent times”, she replied that it was being considered in the form of a loan.

Deputy Pinel responded: “Yes, this has been considered as the Deputy will be aware, in the form of a convertible loan of up to £10million. The connectivity to the island of course, as the Assembly will totally understand, is of vital importance.”

She continued by saying: “We are in talks with [Blue Islands] about what they can offer Jersey in the future on the basis that British Airways and Easyjet have not yet confirmed future flights to Jersey.”

Pictured: Minister for Treasury and Resources Deputy Susie Pinel.

Asking a further question on this matter, Deputy Ahier pointed out that “commercial financing would not be an option for an airline company in the current climate” and then asked: “Is this loan a reckless step to take considering the unprecedented crisis facing the airline industry?”

The Minister denied that it was reckless, assuring the backbencher that “it’s all been looked at with the usual due diligence.” She then reiterated that “we have to maintain our connectivity and Blue Islands offer that at the moment and also we’re talking about increasing flights into Europe with Blue Islands in the future.”

When approached by Express for comment, a Government of Jersey spokesperson said: “The Government is currently in discussions with Blue Islands on the option of a £10million convertible loan. These discussions are continuing towards an advanced stage and details will be provided when arrangements are finalised.”

The news comes after minutes to a recent meeting of the Tourism Recovery Task Force - a group of key industry heads aiming to ensure the sector can rise to the challenges of the pandemic - suggested that easyJet is currently considering linking up to Jersey via three routes: Edinburgh, Bristol and Gatwick.

BA, meanwhile, was reportedly deciding between Heathrow or Gatwick as its primary route to the island.