The Government of Jersey lent Blue Islands £8.5m in mid-2020 to secure “lifeline connectivity during a period of unprecedented disruption” – including transport for medical patients to Southampton.
Ministers said that the airline had since made interest and capital repayments to government of £3.2m.
But, including interest, that left £7.4m outstanding.
And it has now emerged that ministers made two additional loan payments to Blue Islands, including £1.2m on 12 September, and £500,000 on 7 November – seven days before it ceased trading.
The government said as a “secured creditor” it expected “some funds may be recoverable”, although this would be subject to the liquidation process.
The two most recent payments were made as the airline tried behind the scenes to find a buyer.
In its statement, the government said it had supported this process by deferring loan repayments and providing funding to support liquidity, but that the airline had been unable to find a buyer without further significant funding being required.
Millar said discussions had taken place between government and Blue Islands about what support could be provided.
“Those discussions, and their outcomes, were not made public because doing so would have risked compromising confidence in the airline, exacerbating an already difficult situation,” she said.
“Very considerable thought was given before ministers took the decision not to provide further financing, subsidy or to take ownership of Blue Islands.
“We felt this was not the best use of public funds, and that more sustainable, alternative options were available to ensure the continuation of our lifeline routes.”
