Weathering the storm

THERE aren’t many airline CEOs with a smile on their face.

Demand for travel has collapsed thanks to Covid-19. That is horrendous enough.

But then throw in the collapse of a franchise partner, Flybe, just before the pandemic struck.

To say 2020 has been turbulent for Blue Islands is an understatement.

The passing of its founder, Derek Coates, has been another loss.

But Blue Islands CEO Rob Veron greets me with a smile at the airline’s Guernsey offices next to the eerily quiet airport runway.

Why? Because he is confident of a brighter horizon ahead thanks to his ‘fantastic’ team setting a sustainable course ready for lift-off when sunnier days return.

That isn’t to sugar-coat what has happened, as Rob acknowledges. But it’s good to know there is belief we will weather the storm.

Our starting point for the interview is the collapse of Flybe, of which Blue Islands was a franchise partner, in March.

‘It’s been incredibly intense. It’s been this persistent storm it seems because we’ve had this unexpected major incident with Flybe going into administration and then collapsing. That obviously was our primary sales channel. As soon as Flybe was finally grounded, we were quick to deploy rescue flights so people that are booked on Flybe services could get home,’ says Rob.

‘Then almost immediately we had to get the new systems in place, the card acquiring capabilities back up, the website back up – trading again. Gearing up the brand, gearing up the sales channel, doing all the fixing that we need to do.

‘Obviously, we lost a substantial amount of cash when Flybe did go into administration. It was basically sales revenue that hadn’t yet cleared through to us.’

Asked if there was any chance of getting that lost revenue, Rob is sanguine and says ‘probably not’ and pays tribute to his colleagues for restoring the capability to sell again quickly after Flybe’s failure.

‘It was soon dwarfed by the pandemic coming along, and we could sort of see this cloud coming overhead, but we never expected it to be quite as impactful as it has been,’ continues the Blue Islands boss.

‘It has absolutely decimated demand. In the recent couple of months, we’ve seen anywhere between five and 10% of prior volumes. Winter is now coming as well, which typically is quieter as well.’

But he is proud that Blue Islands has operated essential flights for Jersey in terms of contracted services for medical requirements and transporting essential workers.

‘What we’re seeing now is the visiting friends and relatives market, semi-essential travel. It’s certainly not the elective, spontaneous business trip or weekend planned business trip. It’s not the discretionary travel for leisure purposes.’

Rob and his team have also been using the downtime of lockdown and travel restrictions to drive down the business’s cost base and conserve reserves while planning for the future.

‘We’ve gently reintroduced the reinvigorated brand,’ he continues. ‘We’re back to the same core values we had and our welcome difference messaging – and that’s a really nice thing to bring back. We’ve really enjoyed working on that despite it being a very intense spell.’

There has also been the securing of a commercial loan of up to £10m. from the States of Jersey. The Coates family, who own Blue Islands, has also provided generous support, notes an appreciative Rob.

‘The commercial debt piece with Jersey has been really, really important – essential,’ explains Rob. ‘We have also come to a 10-year base carrier deal with Jersey. So we really are becoming Jersey’s local airline, not forgetting we are coming back to our Guernsey-Southampton service.

‘We have been operating a business tunnel on Guernsey-Jersey too. Both routes are very much part of the future too.’

The hard work has also meant Blue Islands has retained all of its workforce, albeit some on furlough-style schemes. As a safety-critical business, a number of pilots, for example, have maintained flying hours through a flight simulator in the Netherlands and then self-isolated upon return.

When it comes to the future, Rob says being ‘nimble’ is key to the schedule. The airline is keeping a close eye on developments in relation to Covid-related travel measures – and has services ready for take-off when that is possible. Guernsey and Jersey remain central to Blue Islands, he stresses.

Further ahead, the airline is looking to fly previous Flybe routes as well as develop Southampton as a base for ‘through runner’ flights from the Channel Islands to Dublin and Manchester, for example, on its own services.

Blue Islands has also teamed up with Loganair to offer seamless connections on their services to Scotland and Newcastle.

‘We’ve very fortunate to have the team we have got to have weathered the storm and built us out better as well,’ he concludes.