Blue Islands Liquidated as Guernsey Impounds Two ATR Aircraft
Blue Islands (SI, Jersey) has entered liquidation with GBP9.1 million (USD12 million) owed to the Jersey government alone, prompting authorities in neighbouring Guernsey to impound two of the airline’s ATR aircraft in an effort to recover outstanding debts.
Jersey’s treasury and resources minister, Elaine Millar, said the government provided a GBP1.2 million (USD1.6 million) loan in September followed by an additional GBP500,000 (USD650,000) in October. These came on top of GBP7.4 million (USD9.7 million) remaining from a COVID-era loan, including interest. Millar said the airline had not made any repayments for six months.
She also revealed that the carrier had been searching for an investor for more than a year but failed to secure one capable of putting the airline on stable financial footing. While the States of Jersey considered acquiring Blue Islands, officials ultimately concluded that “more sustainable, alternative options” existed to preserve the island’s air connectivity.
The government will now subsidize Loganair with GBP1.5 million (USD2 million) to rapidly replace Blue Islands’ routes, less than 48 hours after the airline ceased flying on November 14.
Aircraft detained in Guernsey
Authorities in Guernsey have detained ATR72-500 G-ISLM and ATR72-600 G-ISLP—leased from Abelo Capital Aviation and Jetstream Aviation Capital, respectively—under local legislation that allows aircraft to be held to assist in recovering public funds.
Mark Helyar, president of the States Trading Supervisory Board, said the move ensures “every possible effort” is made to protect Guernsey taxpayers. He did not disclose the amount owed, though local media reported the sum may be “tens or possibly thousands” of pounds.
Route protection and next steps
The Guernsey government will designate the Guernsey–Jersey route as an essential air service from January 15, 2026, meaning only a selected carrier will be permitted to operate it under agreed minimum service levels. Until mid-January, both Aurigny Air Services and Loganair will continue flying the route after stepping in following Blue Islands’ collapse.
Officials said the decision aims to stabilize air services through the holiday season and ensure long-term resilience.
Blue Islands operated three additional ATR72-500s, all of which remain parked at Jersey Airport. The UK Civil Aviation Authority confirmed the airline voluntarily surrendered its scheduled and charter licences on November 14.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com