Blue Islands pays back almost fifth of £8.5m covid loan from Jersey’s government

Thursday 31 October 2024

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

A response to a recent request under the island's 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 Jersey’s 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 Jersey Government agreed to invest in the airline, with Blue Islands moving its operational base to the island 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.

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.

Blue Island runs the Guernsey-Jersey route and also codeshares with Auringy on Guernsey-Southampton.