AN ANNOUNCEMENT early today that the States is finally looking to offload its loss-making airline – a move first mooted by then Treasury minister Lyndon Trott in 2005 – and merge it with the Healthspan Group’s Blue Islands makes perfect sense, but it will be greeted with a twinge of regret.

Aurigny has a history of service and dedication to these islands and, in poor weather, a commitment to getting passengers home that is absent from some of its rivals.

In 2008, when the  airline celebrated 40 years in operation, it was voted 4th best short-haul airline in a poll published in the consumer magazine Which? and carried its nine millionth passenger earlier this year.

In short, it has been a much loved and successful airline providing passengers what they want and also been a significant employer, with 290 staff in the islands, France and the UK.

How much survives if the Blue Islands deal goes through is anybody’s guess but the outlook for the senior team is bleak, as duplicated costs will be the first target of any merger.

The reality, however, is that life for airlines is exceptionally difficult and Blue Islands itself is not viable in the long run unless there is this level of consolidation.

What will become an issue, however, is whether the taxpayer is getting the best value from a cosy ‘kiss and sell’ deal with Treasury or whether Aurigny should go to the highest bidder.

The announcement wasn’t even official before Flybe was reminding people that it had tried on two previous occasions to buy what trades as the islands’ preferred airline. Would it be prepared to offer more than Blue Islands?

How much are islanders prepared to pay to retain some competition to no-refund, baggage-charging, flight-dropping ‘Flymaybe’ and who will retain ownership of the all-important Gatwick landing slots?

Yet how secure is Blue Islands? It publishes no accounts, is probably losing large amounts of money, plus there is no information about  Healthspan’s hotel interests, and it is the group’s huge vitamin pills business that keeps everything afloat.

There’s much more at stake in this potential deal than the States of Guernsey reversing out of airline ownership.