Investigation into Blue Island/Flybe agreement suspended

In doing so, it said it was 'mindful' of the entry of rival airline Waves onto the market, 'which may alleviate Cicra’s initial concerns about the impact on competition on inter-island routes as a result of the Flybe/Blue Islands franchise agreement'.

In addition, it said that it had considered the overall benefit to islanders of continuing the review at this time 'taking into account the significant cost of pursuing the case and the time it would take to bring it to a conclusion'.

An investigation into the franchise agreement between the two airlines was opened in December 2016, looking at whether the arrangement restricted competition between the two airlines, either in terms of the prices each charged or in terms of the routes on which Blue Islands was permitted to fly.

Cicra CEO Michael Byrne said that the decision to suspend the review should not be seen as a statement as to whether or not any party broke the competition law: 'No inference to that effect should be made,' he said.

'Cicra has to prioritise projects that appear likely to have the greatest impact on consumer welfare.

We have decided that, with a new operator now offering flights on the inter-island route, we should step back from this review for the time being and monitor the impact of this increased competition.

This will also allow us to focus our resources on other matters that have a higher priority at the present time.'

Blue Islands and Flybe have been approached for their responses.