Dutch Antilles Airlines Face Acute Financial Problems over Venezuelan Payments Default

Venezuela still owes so much money to airlines in the Dutch Antilles that some of them are acute financial distress, according to sources in Curacao and Aruba. Tiara Air Aruba is in an especially difficult position. Curacao based InselAir is still surviving, though its partner KLM is also waiting on $70 million from Caracas. In total, all airlines together (including non-Antillean) have about $2.6 billion in overdue payments from Venezuela.

“InselAir has taken measures to overcome this,” said CEO Albert Kluyver at his office in Willemstad, without wanting to give further details. Tiara Air does not have these financial reserves. The staff has not received any wages since last month, because the management is awaiting money from Venezuela. Last Friday, some of Tiara’s employees went on strike in Oranjestad, demanding their salaries. The management said they don’t know what to do about the Venezuelan neglect. Divi Divi Air (from Curacao) and Ezair (Bonaire) are also struggling with defaults from Caracas.

The transport of Venezuelans, especially those working in the oil industry in Curacao and the other former Netherlands Antilles, is very lucrative for local airlines. Provided there is payment and that’s exactly the problem: the Venezuelan CADIVI, the currency institution that pays the tickets, fell behind.

“There are regular payments which come in,” said Kluyver, “but the backlog is about ten months.”

His InselAir has built a buffer and knows how to survive.

The Antillean and Dutch governments are “very helpful” and mediate as much as possible between the airlines and the Venezuelan government of President Nicolás Maduro. During the visit of King Willem-Alexander and Queen Máxima to the Antilles and Venezuela in November, the issue also came up for discussion. Venezuelans then promised that the debt would be paid off, but that has not happened yet. In the Antilles there is doubt whether the neighboring country will keep its promises.

The industry associations IATA and ALTA (for South and Central America) are negotiating with the government in Caracas to settle the debt and to make sure that future payments will go smoother.

Source: The Curacao Chronicle