"Remarkable Lack of Improvement in Blue Islands' Operations Despite £10m Loan"

The States of Guernsey, the authority responsible for overseeing Blue Islands' performance after providing a £10 million bailout during the pandemic, is monitoring the long-term requirements of the loan through ongoing review and compliance processes specific to public financial assistance. However, the detailed measures taken by this authority for Blue Islands' loan monitoring are not explicitly documented in available search results.

The Comptroller and Auditor General (C&AG) has published a report titled "Critical Infrastructure Resilience - Transport Links," which sets out a list of Key Performance Indicators (KPIs) linked to the objectives of the Government loan to Blue Islands.

According to the report, just 17% of the total loan had been repaid, despite the repayment period being more than halfway through. Blue Islands, which operates a fleet of five aircraft, presents an inherent risk to resilience, according to the C&AG.

The report raises concerns that existing routes are being compromised by the promotion of the new Paris route served by Blue Islands. It also recommends the development of a formal process for post-implementation review of new air route trials involving the Government, Ports of Jersey, and Visit Jersey.

The C&AG further suggests that the first review should focus on the impact of the new Paris route served by Blue Islands. Lynn Pamment, in this report, expressed concerns about the lack of clear and consistent tracking and reporting of performance measures linked to the Government loan given to Blue Islands.

It is understood that capital repayments and interest are made quarterly in accordance with the terms of the loan. Blue Islands had not paid back any more of its £8.5 million taxpayer-funded loan in the previous eight months, and as of 31 May 2025, Blue Islands had only repaid £1,425,653 of the capital sum, which remained unchanged since 30 September 2024.

In May 2025, Blue Islands cancelled 28 flights from the Summer 2025 schedule due to delays in delivery of a new aircraft and damage to another. The final repayment date for the loan was extended from the end of 2026 to 31 December 2028 due to the second wave of COVID-19 over the winter of 2020/21.

There is no evidence within the Government that information about the KPIs has been systematically collated, evaluated, and reported on during the period of the loan. Ms. Pamment described the lack of monitoring as "particularly concerning" due to recent concerns about Blue Islands' services.

The report underscores the importance of effective monitoring and reporting of performance measures linked to Government loans, particularly in the context of critical infrastructure like air travel. The findings call for improved transparency and accountability in the management of such loans.