Blue Islands: Clarification of the outstanding debt to Government

The Government has issued a clarification following recent reports and discussions regarding Blue Islands.

1. Covid Loan and Outstanding DebtThe majority of Blue Islands’ debt to the Government comes from a Covid loan facility drawn between July 2020 and April 2021. Currently, £7.0 million of capital and £0.4 million of interest remains outstanding. The loan was secured, and thanks to this security, the Government expects to recover most of the funds recently provided to the airline.

The Covid loan helped maintain essential air connections during and immediately after the pandemic. Over the past five years, Blue Islands has:

• Provided lifeline transport for medical patients to Southampton.

• Carried 650,000 passengers, supporting the visitor economy and regional connectivity.

• Made interest and capital repayments of £3.2 million to the Government.

2. Tax and Social Security StatusBlue Islands was up-to-date with tax and social security payments, including ITIS, at the time of ceasing operations. As is common with businesses that stop trading, some bills due after the company ceased operations may remain unpaid. Outstanding balances include:

• GST: Nil

• Income Tax: Nil

• ITIS: £36,596 (October 2025)

• Social Security contributions: £30,396.82 (October 2025)

The Government will submit a claim to the liquidators for all outstanding amounts. If the airline made payments to staff for November before declaring insolvency, there may be additional ITIS and social security contributions still owed for that month.