Blue Islands Yet to Repay One-Fifth of COVID Loan

Blue Islands Has Repaid Just 17% of £8.5m Covid Loan, Five Years On

Blue Islands has repaid less than a fifth of its taxpayer-backed Covid loan—despite being more than halfway through the agreed repayment period.

The airline, which received an £8.5 million loan in July 2020 to support operations during the pandemic, has so far returned just £1.43 million of the principal amount. The final repayment is due by 31 December 2028.

According to figures obtained via a recent freedom-of-information request, the total repaid as of 31 May 2025 remains unchanged from last September. That equates to just 17% of the total, while 59% of the repayment timeline has elapsed.

Although repayments are scheduled quarterly under the terms of the loan, Blue Islands has not made any capital repayments in the last two quarters. To meet its obligation on time, the airline must now pay more than £500,000 every quarter for the remaining 14 periods.

The government has been contacted for clarification on whether Blue Islands is in breach of the agreement, or if any enforcement action is under consideration.

The disclosure comes amid heightened scrutiny of the airline’s operations following months of passenger complaints over delays and cancellations. Last week, Economic Development Minister Kirsten Morel said the government had made its concerns “very clear” to the airline’s leadership.

Deputy Morel attributed recent service disruptions to Blue Islands’ limited fleet size and global supply chain delays affecting the availability of spare parts. He also pushed back against calls for a statutory compensation scheme, warning that without thorough analysis such a move could drive up fares or put smaller carriers at risk.

Currently, flights operated by Channel Islands-based airlines are not covered by EU261 or UK261, leaving local passengers with fewer protections than their counterparts on the mainland.