Tuesday’s front page featured two stories regarding Winair, one announcing a change in leadership and the other about a significant increase of the local airline’s turnover. The latter news came from The Hague rather than Philipsburg, but at least provided some recent figures.
Revenues grew by 108% from US $14.95 million in 2021 to $31.21 million in 2022 and there was a modest profit of $1.64 million before taxes, following large losses during the two previous years. This also enabled investing $3.74 million in dry- rather than wet-leasing two ATR planes used to service the ABC islands in a sustainable manner, which is to further improve financial results going forward.
In fact, first quarter 2023 earnings rose by 35% from the same period a year ago and the number of flights was up 11%. The number of passengers grew by 30% and the occupancy by 19%.
Last year’s average rate was 56%, but one has to keep in mind that St. Eustatius and Saba were perhaps frequented more often than strictly justified volume-wise, in the interest of their connectivity. That is very important to the Netherlands, which holds 7.95% of shares in the largely St. Maarten-owned company and provided mortgage loans totalling US $4.5 million in 2020 and 2021.
Suffice to say that the devastating impacts of both Hurricane Irma and the COVID-19 pandemic have evidently been overcome, so that retiring long-time Chief Executive Officer (CEO) Michael Cleaver could pass the baton in confidence. The expansion of the Supervisory Board from three to five members (see Monday paper) should help enhance stability as well.
However, clarity is still lacking on plans to introduce a so-called Public Service Obligation (PSO) for the carrier regarding Saba and Statia. This would ensure low ticket prices and a certain frequency in exchange for subsidy from the Dutch government.
Whether that remains a good idea or even necessary may be debated, as the current two flights per day appear adequate enough. There is also competition from the Makana ferry between St. Maarten and the two other SSS islands supported by the same Dutch government to consider.
It seems a bit contradictory too that The Hague wants to actively intervene in Winair’s market yet aims to relinquish its shares “as soon as and in case” the PSO instrument can be deployed. The latter is to be made possible by amending the Caribbean Netherlands Aviation Law, for which preparations are reportedly underway.
Regardless of the outcome, uncertainty is almost never good for business and the sooner a final decision can be taken, the better.
