InselAir (Curaçao) has approached the Curaçaon government over the possible extension of state aid to the struggling carrier.
According to the Curaçao Chronicle, the possibility of state intervention in the locally-based carrier has been considered in the interests of the island's greater economic good. However, Minister of Economic Development Eugene Rhuggenaath has reiterated government's unwillingness to get financially involved in the airline given its past dealings with the now defunct ALM Antillean Airlines (Aruba).
Parliament was due to have considered Insel Air's case during a session on Friday, November 25.
Local press reports indicate that in the past four weeks, KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) and TUI fly (Netherlands) (OR, Amsterdam Schiphol) have both suspended their respective codeshare agreements with Insel Air given its increasingly erratic operational performance.
For its part, Insel Air's management, as with that of Aruba's Tiara Air (Aruba) (Aruba), has blamed the Venezuelan currency crisis for its poor state of affairs.
"The reality is that Insel Air currently suffers from an extremely challenging cash flow situation, as a result of a claim of over USD100 million dollars on neighbouring country, Venezuela," CEO Albert Kluyver said in October.
"For more than six years, Venezuela has been a crucial market for the existence of Insel Air. To keep our company solid in the future, we have reduced the [Venezuelan] market share of 34% to less than 4% and at the same time we seek completion with alternative vital routes in the region. This is to keep the Insel Air organization and infrastructure at the same level and to guarantee the employment of our 750 staff."
Kluyver has also confirmed that talks with an unspecified third party over a possible strategic partnership were currently ongoing. If secured, the investor would assist in Insel Air's fleet renewal and upgrade plans which currently pivot around the A319-100.
Start-up AvA Airways (Curaçao) (Curaçao) has since submitted a proposal to government albeit with several conditions attached, namely that government cover all severance payments to the tune of USD15 million and that Insel Air's AOC and economic permits be transferred to AVA Airways Curacao. Once the latter has been completed, the certificate must also be expanded to include A319 and A320 Family aircraft, AVA said.
In terms of operations, Insel Air currently operates seven Fokker 50s, two MD-82s, and one MD-83 on scheduled passenger flights throughout the Caribbean, Latin America and the United States. Its InselAir Aruba (Aruba) unit also operates a similar network albeit using five Fokker 70s, one MD-82, and three MD-83s.
