Winair: tough old bird hell-bent on beating another crisis
PHILIPSBURG — To describe Winair as a tough old bird may sound a bit disrespectful but there is no question that the company is tough as nails. Faced with the umpteenth crisis in its now 60-year existence, the airline is hell-bent on coming out of it stronger than ever.
This is not to say that the challenges Winair is facing are easy to overcome; far from it. But the company has been down in the doldrums before and it fought its way back to health with a vengeance.
Nevertheless, the data Winair presented at its most recent shareholders meeting are quite sobering. In 2020, the airline booked a net loss after taxes of $1.4 million. Revenue dropped from $40.9 million in 2019 to $16 million in 2020. The number of passengers dropped from 323,258 to 92,947 – a dramatic decline of 71.2 percent. The number of flights went from 28,293 in 2019 to 9,437 in the disaster year 2020.
“The drastically reduced demand in flights with unpredictable and disruptive changes in protocols forced the company to reduce the staffing level,” Winair stated in a press release. The head count went from 152 to 98. The company also paid out $2.3 million in refunds and $688,426 in travel vouchers because of canceled flights.
In January, Winair received a €2.7 million (almost $3.3 million) mortgage loan from its minority shareholder The Netherlands. Winair had to put up its building as collateral. The term of the mortgage is 18 months and it can be extended to 6 years. The interest rate is 4.41 percent.
During the term of the mortgage, Winair has to provide at least two flights a day to the islands of Saba and Statia. Payment of bonuses and dividends is prohibited as long as the loan has not been repaid.
The loan safeguards the inter-insular connectivity between Saba, Statia and St. Maarten for the short term, Minister Cora van Nieuwenhuizen (Infrastructure and Water Management) wrote on December 31, 2020, to the Dutch Second Chamber, adding that the connectivity of the Dutch Caribbean remains fragile and remains dependent on the progress in the fight against the COVID-19 pandemic.
Eight months after it received the mortgage, Winair is once again desperate for a capital injection and this time the Dutch government is rather reluctant to help again.
George Greaux, the chairman of the Winair-board pointed out in answers to emailed questions that the current shareholders (St. Maarten and the Netherlands) took over the airline in 2010 with a negative equity of $11 million.
“Overcoming that has always been a priority for supervisory and executive boards. Fortunately, and on our own resources, we gradually eroded it to the point of almost going into positive territory until Hurricane Irma came along.”
Irma occurred in 2017 and it was not the only disaster to hit Winair: in 2020 the company was confronted with the effects of the COVID-19 pandemic.
In 2019 the airline booked a record high level of revenue, but in 2020, Greaux said, the company “hit the pandemic wall with zero income for almost four months.”
Winair’s mission is to become profitable with a vision on long term growth and prosperity. Greaux: “The company can survive this and will do so struggling as it has in the past. But after ten years it is time that the shareholders invest in the company in a proper way to allow it to take on external shocks while setting itself up for continued growth in the region.”
Bolstering the balance sheet with a capital injection will create the conditions whereby the shareholders can start earning dividends, Greaux adds. “What to do with those dividends? One shareholder could use them for fare vouchers for their constituents in Saba, Statia and Bonaire.”
Greaux did not respond to a question about rumors concerning a possible takeover of Winair by Guadeloupe-based Air Antilles. That option has become less likely after the French General Directorate of Civil Aviation grounded the entire Air Antilles fleet because of deficiencies in the company’s maintenance program.
This measure had an immediate impact on Winair because it uses wet-leased planes (that is: planes with a crew provided by Air Antilles) for flights to Aruba, Bonaire, Curacao and Haiti.
Winair stated in a press release that the flight-interruptions will last until at least September 7.
BES-reporter.com notes that the situation is a déjà-vu for Winair. ”It saw a similar situation arise with then partner PAWA-Dominica, which ultimately led to the complete shutdown and demise of the Dominican carrier.”
The Winair-board remains confident about the future. “We have seen a much less volatile pandemic protocol in 2021, allowing for more reasonable resumption of scheduled flights according to market demands. The forward looking reservations for the peak of the season is cautiously optimistic, calling for a DHC-6300 to be brought back into service for that period and the (re)hiring of personnel on a need basis.”
In a reaction after the shareholders meeting, Prime Minister Silveria Jacobs expressed support for the local airline, though, given the country’s dire financial situation, it is doubtful that it will provide any financial support. “St. Maarten will do all it can to support the request for a loan with the Dutch shareholder to maintain Winair’s viability and sustainability for St. Maarten, Saba, St. Eustatius, St. Barths and all other destinations in the region for which we remain a hub.”
The Netherlands holds 7.95 percent of the Winair-shares. The remaining 92.05 percent is in the hands of the government of St. Maarten.
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