St. Maarten’s Winair secures added $1.5mn Dutch gov’t loan

The Dutch government has decided to grant another USD1.5 million loan to help struggling Winair (WM, St. Maarten) survive but plans to divest from the airline in the long-term, according to Minister for Infrastructure and Water Management Barbara Visser.

In a letter to the Dutch House of Representatives (Tweede Kamer), Visser said in light of the ongoing pandemic, an existing loan dated December 31, 2020, would be increased to USD4.5 million. “That amount is equal to the foreclosure value of the collateral. In addition, the repayment term will be three years from now, with the option to postpone it for six years from December 31, 2020.”

“Increasing the mortgage loan does not equate to state aid,” she stressed. “I explicitly choose not to donate the financing needs of the company and to contribute to a restructuring. In principle, the cabinet is of the opinion that it is up to the country of Sint Maarten to weigh up the interests involved in its national airline, and whether or not to grant aid,” she said. Sint Maarten owns 92.05% and The Netherlands holds 7.95% of Winair’s shares.

She said increasing the loan was an interim, short-term solution to guaranteeing accessibility for the Dutch overseas territories of Saba and Saint Eustatius with St. Maarten. A recent evaluation of state participation in Winair also found it not to be the most suitable way to ensure continued accessibility which also requires affordable fares and sufficient frequencies.

Visser said she was currently exploring a public service obligation (PSO) on routes between Sint Maarten and Saba and Sint Eustatius, which would allow the capping of fares, set the number of frequencies, and provide fair competition on the routes. Legislative changes would have to be prepared to create a PSO and a report-back would be given in the autumn of 2022.

“Since state participation as an instrument proved insufficient to safeguard the public interest, I will divest the shares in Winair as soon as I can use another instrument,” Visser explained. The Netherland’s 7.95% or 10,000 shares valued at USD560,000 would first be offered to the country of Sint Maarten, she explained.

Visser will also investigate whether a relaxation of airline establishment requirements could lead to improved connectivity on Bonaire, another island in the Dutch Caribbean.

Meanwhile, a master plan will be ready before the end of 2021 on the possibilities for electrification of aviation in the Caribbean, in the form of a route map, which local parties could use when developing electric aviation in the region. Visser believes electrification of aviation can improve connectivity in the entire Caribbean region in the long-term.