The Channel Islands Competition and Regulatory Authorities yesterday announced that it had agreed to allow Aurigny and Blue Islands to operate a joint Guernsey-Jersey service after the airlines applied for an exemption under the islands' competition laws.
It said concerns had been raised about possible increases in fares and it had sought to clarify the airlines' intentions, given that the proposals would lead to lower operating costs.
'The parties clarified that at this stage they did not expect to offer lower fares,' the regulator said in its decision.
'Instead, they were seeking to mitigate the losses to ensure a sustainable service.
'They contended that customers' interests will be served through the maintenance of competition which, they submit, would otherwise disappear in the absence of the code-share agreement.'
The new arrangement, which will run for two years, will see Blue Islands operate its 46-seat ATR-42 on the route.
Aurigny will take a fixed block of seats at a set price and will provide ground support at the airports in both islands.