Curaçao’s Chamber of Commerce has called for so-called “seat guarantees” (see Monday paper) to get more flights. It involves a system whereby airlines are compensated if average occupancies drop below an agreed-on level on a certain route, to ensure operational expenses can be covered.
The practice is generally frowned upon in the region’s tourism industry. After all, vacation destinations should be attractive enough to interest carriers providing the supply to adequately meet demand.
Regarding St. Maarten/St. Martin, decent load factors were recently reported for both American Airlines from the US and Copa Airlines out of Panama. However, this does not necessarily mean there is an acute capacity shortage.
The latter seem to be the case for Curaçao mainly because KLM reduced its still ample service from the island’s by far biggest source market the Netherlands, due to – among other things – issues at Schiphol Airport. The opening of Sandals Resort there also led to a bigger flow of American visitors and need for US flights.
But it’s not just about frequency. Ticket prices are relatively high and enticing other airlines could help bring them down.
There’s obviously a financial risk, although such guarantees offered by Curaçao in the past supposedly were never utilised. In addition, one must take care not to alienate current or potential aviation partners which don’t get such an incentive.
Charters to Princess Juliana International Airport (PJIA) as organised in the past could be an option, especially to open up specific markets offering few existing direct air connections like South America. Available funds remain limited, but with the local hospitality sector expected to struggle during the coming months, the possibility of public/private partnership (PPP) endeavours in that sense is not to be ruled out.
