The collapse of regional airline Blue Islands in November 2025 triggered a chain of disruptions across the Channel Islands and parts of the UK, leaving aircraft stranded, routes suspended, over 100 employees made redundant, and other airlines scrambling to fill the gap. Blue Islands, based in Jersey, was a regional carrier operating short-haul routes across the Channel Islands and the UK but on Nov. 14, the airline ceased operations, grounding its fleet with little warning.
Why were the aircraft grounded?
The airline’s shutdown followed severe financial difficulties, driven by a combination of rising operating costs, aircraft leasing expenses, fuel prices and reduced access to funding. Like many small regional airlines, Blue Islands relied heavily on thin-margin routes and leasing arrangements.
When Blue Islands collapsed, five ATR72 aircraft were left parked at airports in Guernsey and Jersey. Airlines often do not own their aircraft and instead lease them from specialist aviation finance companies. However, airports are typically owed money for services such as landing fees, parking, ground handling and fuel, which can lead to aircraft being held until debts are settled.
At Guernsey Airport, two aircraft remained grounded because the airline had outstanding debts. Under aviation and commercial law, airports can retain aircraft until those debts are settled, even if the planes belong to leasing companies. Guernsey Ports, the government-owned body that operates Guernsey Airport, recently confirmed it has reached a settlement with the aircraft owners, allowing the planes to be released.
The agreement followed complex legal negotiations involving Guernsey’s Law Officers. Mark Helyar, president of Guernsey’s Trading Supervisory Board, said the outcome was “very positive for the island,” though the exact amount of money involved has not been disclosed for commercial reasons.
Three additional ATR72s formerly operated by Blue Islands were parked in Jersey and have already been repositioned, with two relocated to Exeter in early December and one to Copenhagen, which has since been re-registered.
What’s happening with Guernsey–Jersey flights?
Following Blue Islands’ collapse, the Guernsey-Jersey route was initially open to any airline. Aurigny and Loganair both began operating the service. However, the Guernsey government later classified the route as essential, requiring airlines to apply for a licence.
- Aurigny Air Services, Guernsey’s state-owned airline, has now been awarded the licence and will operate the route from Jan. 15, 2026
- Loganair has also applied, but its application has not yet been reviewed
The Blue Islands collapse highlights how fragile regional air networks can be and how quickly an airline failure can disrupt connectivity, strand aircraft and impact other carriers, particularly in island communities that depend heavily on air travel.
Were you planning to fly with Blue Islands? Let us know in the comments!
