The Government of Jersey is to provide a loan of up to £10m to Blue Islands, which will be repaid over six years.
The Minister for Treasury and Resources, Deputy Susie Pinel, has signed an agreement to invest in the airline to maintain key links with regional UK airports and a number of European destinations.
Blue Islands has agreed a base carrier deal with Ports of Jersey, under which Blue Islands will move its operations to Jersey, taking on many former Flybe routes.
Collapse in demand
The aviation sector has been badly hit by the Covid-19 outbreak. Flights have been grounded across Europe since the end of March and several airlines have failed in the face of an unprecedented collapse in demand.
Governments across Europe are providing packages of financial support, as the lender of last resort, in recognition of the importance of connectivity to their economies.
Since the collapse of Flybe on 4 March, Jersey Airport has three main airlines: British Airways, easyJet and Blue Islands. Each faces significant challenges from the impact of Covid-19, and easyJet and BA have received UK government-backed loans of £600m and £300m respectively.
Strategic priority
The Government of Jersey’s Common Strategic Priorities highlight the importance of robust air links to the island. Its Economic Recovery Plan also recognises that secure connections to the UK and further afield play a fundamental role in returning to a healthy economy.
Susie Pinel commented: "Blue Islands serves the smaller, regional UK airports that either cannot accommodate larger planes or are not commercially viable for the larger aircraft used by easyJet and British Airways.
"The loan will also offer opportunities to develop more direct routes into European countries, and it provides an alternative to the larger airlines, for whom Jersey is a small operation."
Blue Islands CEO Rob Veron (pictured) said: “We are pleased to have reached an agreement with the Government of Jersey and the base carrier contract with the Ports of Jersey. This provides a strong platform to provide vital connectivity for islanders and will play a key role in the recovery of the island’s economy."
New routes from Jersey will include Birmingham, East Midlands and Exeter, and there will also be a new route from Exeter to Manchester.