PHILIPSBURG - The Antillean airline company Winair defends the million-dollar loan that the company receives from the Dutch government. There was a fuss on the islands because competing players do not enjoy that luxury. Commissioner Hans de Jong, however, calls the support justified and necessary.
In an open letter to our editorial team, De Jong substantiates his opinion that the three million dollars that Winair receives as a loan is necessary to keep the company and the connections between the Antillean islands afloat.
“The granting of financial liquidity support by the Dutch government in the form of a loan of three million dollars has apparently caused quite a bit of stir in the Caribbean part of the Kingdom. The media, both in the Netherlands and in the Caribbean part of the Kingdom, paid extensive attention to it in recent days and parliamentary questions were also asked in the Netherlands,” says De Jong.
“In a letter of 31 December to the Second Chamber of the Dutch Parliament, Minister Cora van Nieuwenhuizen (Infrastructure and Water Management) provides a clear explanation of how and why this mortgage loan is granted. As may be clear from the letter, it is not a free ride for Winair. It concerns a mortgage loan with a building that belongs to Winair as collateral, with an interest rate of 4.41 percent. In principle, that money, including the interest, must be earned back, and paid back within eighteen months. Curbing the coronavirus in the short term and thus restoring the number of air travel movements is essential to be able to fill in this timeline realistically.”
Necessary connections
He continues: “The Dutch State is a 7.95 percent shareholder in Winair. In the run-up to the dismantling of the country of the Netherlands Antilles, this was determined at the time based on the Asset Division Committee. For the Netherlands, the argument at the time and still is, says the letter, was the public interest of maintaining flight connections with Saba and St. Eustatius. The Netherlands therefore (apparently) has an interest in the continuation of connections and thus the transport security of the service level. Before the outbreak of the COVID-19 pandemic in March of last year, Winair served not only the Windward Islands, but also Curaçao and through Curaçao Bonaire and Aruba. A direct connection between Sint Maarten and Bonaire turned out not to be viable, due to the lack of enough passengers. By developing the various routes, Winair contributed to improving the connectivity of the Caribbean part of the Kingdom; a hole that was left after InselAir had to cease service because the AOC was not renewed.”
According to De Jong, no one could have escaped the fact that after the disappearance of InselAir connectivity had taken a major blow, which is also reflected in the development of the transport figures over the past ten years. “The important role of Winair in transport within the Caribbean part of the Kingdom cannot therefore be denied and the Dutch support from a public interest in maintaining the air connections underlines this statement. Incidentally, the government of Sint Maarten, as a major shareholder, has provided salary support to Winair, within the financial possibilities of the island, to cope with the consequences of the corona pandemic and the decline in services.”
Justified support
Is there any question of (unfair) state aid at the expense of the other airlines operating in the Caribbean? De Jong does not think so. “For example, Aruba and Curaçao are free to give their “own” airlines a financial boost. However, unlike Winair, all companies are privately owned and the request for support must therefore come from these private entities. The agreements that the Netherlands has concluded with both countries for a third tranche of financial support in the last quarter of 2020 certainly offers opportunities for this. Unfortunately, I don't know whether Aruba Airlines, DiviDivi, EZAir and Jetair have approached their respective governments.”
De Jong emphasizes that it concerns a loan that must be paid back properly and preferably on time and with the agreed interest. “It is precisely the fact that Winair also serves a French territory that the loan has been extensively tested for compatibility with EU legislation and regulations regarding State aid. Against the aid amount is a transport obligation with a minimum service level. What other company within the kingdom has this obligation? This is a rhetorical question by the way; Not a single one."
Research that Peter Hartman, former CEO of KLM, conducted with the participation of all parts of the Kingdom, into the connectivity within the Caribbean part of the Kingdom has clearly shown, according to De Jong, that the routes within the Caribbean part of the Kingdom in absolute numbers thin, where the market forces do not always come into its own.
“His committee, which was established at the beginning of 2017 on the proposal of the ministers Eugene Rhuggenaath (then Economic Affairs) and Suzanne Camelia-Romer (then Traffic and Transport) of Curaçao, makes a few steps forward on how to improve the sustainability of the service level between the (islands) countries at affordable rates. Introducing a kind of public service obligation, as the Economic Research Foundation offers the Commission, is certainly an option and worth further discussion, but at the same time let the policymakers look at the level of the charges imposed by the various actors in the aviation chain on the airlines concerned, so that the alleged high fares charged to the passenger can be put into perspective. By simply comparing the rates in the Caribbean with the rates charged to the passenger in Europe, among others, without proper substantiation, the discussion remains stuck in expressing mere emotions that do not do justice to the importance of connectivity by the air that is the lifeblood of the islands and islands of the Caribbean part of the Kingdom. A nice challenge for after the elections in the Netherlands and Curaçao in March.”