More Than £7.3m Still Owed to Jersey Following Blue Islands Collapse
More than £7.3 million in loans provided to Blue Islands remains unpaid, a year after the Channel Islands airline ceased trading, according to the Government of Jersey.
The Treasury and Exchequer confirmed that £7,382,822 is still outstanding, adding that no further payments have been received from the airline's liquidators since its closure.
However, administrators Ernst & Young (EY) say most of Blue Islands' remaining assets have now been sold or converted into cash, with additional payments expected as the liquidation process continues.
EY also confirmed that all preferred creditors are expected to receive full payment.
The former chief executive of Blue Islands has been approached for comment.
Meanwhile, Guernsey Ports has recovered most of the money owed to it by the airline following an agreement with aircraft lessors after the company collapsed on 14 November 2025.
Guernsey Airport director Richard Thomasson said the majority of the debt had been recovered through the settlement, although the process of recovering the remaining balance is still underway.
The outstanding amount is believed to include unpaid rent and landing fees.
Airlines step in following collapse
The closure of Blue Islands left passengers across Jersey and Guernsey facing cancelled flights and uncertainty over important air links with the UK.
In response, Aurigny expanded its operations, while Scottish airline Loganair introduced replacement services from Jersey. Both carriers also offered special rescue fares to help affected passengers continue travelling.
Loganair chief executive Luke Farajallah said the airline had carried almost 150,000 passengers during its first year operating the replacement services.
He explained that the company had to begin flying routes before it was able to start selling tickets.
Aurigny chief executive Nico Bezuidenhout described the collapse of Blue Islands as highly undesirable and unexpected, saying his airline had been required to restore vital connections almost overnight.
He also warned that smaller airlines face increasing difficulties maintaining regular services in regional markets.
Guernsey records growth in passenger numbers
Despite the disruption caused by Blue Islands' collapse, Guernsey has experienced a record year for passenger movements, according to Deputy Sasha Kazantseva-Miller, President of the Committee for Economic Development.
She said the committee had helped secure an earlier introduction of a daily British Airways service, contributing to a 30% increase in visitor numbers to Guernsey over the previous six months.
Deputy Kazantseva-Miller said British Airways accounted for approximately 81% of that growth.
Ports of Jersey chief executive Matt Thomas also said the island now has access to more destinations than ever before following the airline's liquidation.
Although he acknowledged that Blue Islands would be missed, he said the island now had a group of established airlines operating across different market sectors.
Rising costs continue to challenge regional aviation
While the replacement of Blue Islands' services has brought changes to the Channel Islands' aviation market, regional airlines continue to face wider economic pressures.
Aviation expert John Strickland highlighted the impact of rising fuel costs, linked partly to the conflict involving the United States, Israel and Iran.
Although fuel prices have eased slightly in recent weeks, he warned that higher operating costs could affect airlines' ability to maintain services.
He also pointed to the price sensitivity of passengers travelling from smaller communities, where demand and passenger numbers are generally lower.
The ongoing financial recovery from Blue Islands' collapse, alongside rising operating costs, highlights the continuing challenges facing regional aviation across the Channel Islands.
